BMW Headquarters in
Munich's Olympiapark: Other firms,
like Fiat and IKEA, that
forget where they came from, are
making a fatal error.
Sueddeutsche
Zeitung,Germany
Rootless
Multinationals are at a Grave Disadvantage
"At
a time when large corporations are becoming increasingly global, and the
interconnections with other firms are becoming more opaque every day, the
corporate headquarters becomes the linchpin. The question of where a company
comes from is often the only one that can still be definitively answered."
When German corporate leaders
travel abroad, they like to talk about their “second home.” Take BMW CEO Norbert Reithofer, for example. Last fall, when he journeyed to
South Carolina in the American South for the expansion of an automobile plant, he
spoke of his “second home” with striking frequency.
The local bigwigs liked what
they heard and the mayor applauded. But Reithofer
didn’t play the southerners alone. His audience sat in the company’s first home
… at headquarters in Munich. For them, their CEO’s words were primarily a
promise. Cars can and must be built everywhere now - in the United States, South Africa
- and in China. But the company’s heart beats in Munich.
A corporate headquarters is
more than a warehouse with machines and assembly lines. It is where decisions about
products and strategies for the future are made. It’s where research takes
place and marketing experts hone the company’s image. It is where all financial
streams converge. The central management of a corporation sets the pace for the
company and acts as a center for corporate culture.
Especially at a time when
large corporations are becoming increasingly global, and the interconnections
with other firms are becoming more opaque every day, the corporate headquarters
becomes the linchpin. The question of where a company comes from is often the
only one that can still be definitively answered. Worldwide, BMW advertises
using images of the company’s “four-cylinder” building at Munich’s Olympiapark. It’s
just a piece of architecture, but it helps create an identity. And it is a trademark
that embodies a certain “rootedness.”
The ground rules are simple -
and yet they are ignored by many. A study of what not to do could be made using
Fiat CEO Sergio Marchionne as an example. A few weeks ago, he
complained that his corporation would be better off without Italy and Italian
auto plants.
He merely intended to wring
concessions from the traditionally-strong Italian unions. But in fact, the
Italian-Canadian CEO had the entire country up in arms. And a few days ago he
went too far - suggesting that Fiat headquarters could be moved from Turin to
the United States.
Marchionne follows a simple logic: two years ago, he decided to
take over ailing U.S. manufacturer Chrysler. As a result, a trans-Atlantic
structure is being created, a new Italian-American auto giant, with factories
everywhere. In the Auburn Hills near Detroit, in Turin, in
southern Italy, and in Turkey and Brazil.
Posted
by WORLDMEETS.US
Because of this, Marchionne seems to believe that it doesn’t matter where
the heart of the combined company beats - in the northern Italian region of
Piedmont, in Michigan, or somewhere else. This is a fatal error: Chrysler and
Fiat have only a brief shared history. Fiat and Italy, on the other hand, have
a common history that has existed since 1899. Marchionne’s
comments are insensitive - and extremely risky.
Cars manufactured by Fiat
were always the most successful when they reflected the culture from which they
came. The Fiat 500 [see below], for instance, is an Italian car of this type.
And in the case of the Alfa Romeo, the myth rests primarily on the images that
come to mind when people think of Italy. Running Fiat from Detroit would be the
end - because Detroit triggers different associations than Turin.
The 2010 Fiat
500
It’s
particularly embarrassing when marketing and reality diverge completely, as is
the case with IKEA. On the
surface, the furniture store likes to portray itself as being Swedish to the
core: Scandinavian and down-to-earth, with 200 million copies of the
blue-yellow IKEA catalog printed every year. The image would likely be very different
if the IKEA community knew where the multinational shelf-maker is really
controlled from. According to research by Swedish television, IKEA's true heart beats further south: the multi-billion
dollar company will likely soon be controlled by a foundation in Liechtenstein.
Others aren't giving in to
temptation. When the investment banking division at Deutsche Bank grew increasingly
influential, employees in Frankfurt worried that headquarters would be moved to
London. But the company's directors felt that even a global bank needed a
strong domestic market.
Small companies need a home. Large corporations, whose sales are higher than the gross national incomes
of some countries, even more so.
