multinational corporations and the diffusion of world standards: a theoretical exploration

MULTINATIONAL CORPORATIONS AND THE DIFFUSION OF WORLD STANDARDS:

A THEORETICAL EXPLORATION

JAY WEINSTEIN Eastern Michigan University

JOHN R. MclNTYRE Georgia Institute ~[ Technology

ultinational corporations affect economic, political, and inter- personal relations wherever they do business. But, as the di-

verse and rapidly growing body of literature on the local impacts of multinationals attests, a general theory that accounts for the scope and character of these effects--even for a limited set of corporations or a specific type of contact--does not exist.

Disagreement among students of multinationals stems in part from the diversity of disciplines which claim an interest in the phenomenon.' Economists--of various ideological persuasions, lawyers, political scientists, journalists, historians, geographers, sociologists, and many others have attempted to understand, to evaluate, to prog- nosticate about, and to consider policy options in relation to this new (and undeniably important) form of social organization. While each has brought to the study of the benefits of its distinctive perspective, each has also inserted its particular version of disciplinary parochialism: insisting that certain aspects of multinational operations "count" and suggesting (by design or neglect) that others do not.

Political scientists and economists have conducted much empirical research on MNCs, but their findings offer little systematic evidence on actual positive and/or negative impacts of multinational operations. We even lack a clear understanding of the differences, if any, between the manner in which multinationals operate in Western industrialized countries, in less industrialized countries, or, for that matter, in cen- trally planned economies. In brief, there are major gaps in the empirical evidence thus far accumulated. Case studies have been undertaken on the multinational activities of different types of firms (i.e., service-providers, merchandisers, manufacturers, extractors) and in various countries with different levels of development, types of government, resource endowments, demographic features, etc. Despite this, it is extremely difficult to generalize from such results to basic issues like pricing of products, resource exploitation, labor policy, export policy, investment decisions, political activities, and choices of

52 Studies in Comparative International Development / Fall 1986

technology. Unfortunately, even conventional microeconomic analysis and the theory of the firm have proved to be woefully inadequate in dealing with a phenomenon as pervasive, diffuse, and complex as the multinational enterprise.

Another reason for the lack of consensus in the study of MNCs is the frequently intense, partisan atmosphere that characterizes the field. None of the prevailing ideologies--liberalism, Marxism, and economic nationalism--has provided a clear theoretical framework for understanding the phenomenon in a post-Bretton Woods international political economy. Yet these ideological perspectives continue to have a strong influence on the views of academics, officials, and the general public. In fact, polemic has been the usual mode of discourse on the topic of multinational business.

Critics, particularly those on the left, examine the impacts of MNCs for evidence of their unethical, exploitative, and self-serving nature. Among the best-known representatives of this group are Barnet and Muller (1974) who ask: "by what right do a self-selected group of drug- gists, biscuit-makers and computer designers become the architects of the new world?" (361). Multinational corporations are thus viewed as deriving unjust advantage from their capacity for centralization, information control, and hierarchical organization; that is, they are de- picted as inherently antidemocratic. Such critics invoke a quasi- conspiracy theory to explain the dynamics of the multinational, with a heavy emphasis on negative impacts: misuse of the world's resources, increases in the disparities between poor and rich, and contributions to the rise of authoritarian governments.

Right-wing proponents of MNCs attempt to substantiate the widely held characterization of the corporations as benign agents of economic growth. These neo-liberal defenders consider the multinational as a critical "transmission belt" of managerial know-how, capital, technology, and economic growth. Spokespersons differ, of course, on their respective assessments of the impacts. One version of this defense is offered by the economist Harry Johnson. He views the multinational as contributing to the acceleration of the trend toward "world economic integration." Eventually, according to his model, the multinational firm will prevail over the nation-state (Johnson, 1970:24). A related position offers a more tempered view in which the multinational enterprise is seen as beneficial but not as monolithic. It is viewed as being highly responsive to host-nation demands--more so, in fact, than purely domestic firms, because of its greater flexibility. In either

Weinstein and Mclntyre 53

case, impacts are viewed as largely positive: the tide of economic growth caused by the activities of multinationals lifts all boats.

Beyond this type of parochialism and partisanship concerning MNCs, there lies an obviously highly complicated and recalcitrant reality. For, despite the aims of ideologues and disciplinary purists to encapsulate the effects of multinationals in neat formulas, the facts-- such as are known--do not lend themselves to easy, unambiguous interpretations. 2 To this extent, the search of" the" theory or "the" law of multinationals must be and will probably remain fruitless. Evi- dence-a lbe i t often annecdotal, scanty, or even tainted--exists to sup- port any and all ideological and disciplinary orthodoxies, provided that the evidence is selectively marshalled (as indeed it often is). But when one is less than selective, it is difficult to ignore the fundamentally inconsistent, even self-contradictory nature of the multinational's impact.

This article focuses on the formulation of some hypotheses about a common and widespread effect of multinational/host country relations. Recognizing that "common" and "widespread" are relative mat- ters, we are suggesting that the refinement, testing, and elaboration of hypotheses such as these will help to achieve a higher degree of consensus than now exists about the general role of multinationals--short of establishing unexceptional "laws." Thus, these hypotheses might serve as part of a second "mini-theory" of multinational corporations.

The method or approach (one usually does not speak of "methods" in the context of.formulating hypotheses) employed here is self-con- sciously non-partisan and overtly interdisciplinary. We have attempted to suspend both praise and blame of the multinational so that we might see it more clearly as the complex social force that it is, one whose workings have consequences, great and small, intended and unintended, for those who relate to it. We have also drawn upon several (though certainly not all) of the social science disciplines that study multinational corporations in order to identify common and possibly important features of their operation: sociology, anthropology, political science, communication theory, geography, and perhaps one or two others. The proof, of course, is in the testing; and though one will find here hints for further, empirical research, such proof is not undertaken in this article.

THE MULTINATIONAL AS A DIFFUSION AGENT

It is readily accepted that multinational corporations directly affect a host country by contributing to its level and quality of industrializa-


tion--although serious disputes exist concerning details of this rela- tionship. Some writers have noted that multinationals affect a host society in other ways as well. Quinn (1969), for one, explores multinationals as agents of change through technology transfer, while Aitken (1973) considers the role of multinational managers. Gladwin (1978), Thorelli (1966)~ Johnson (1970), Hancock (1980), and Woodroofe (n.d.) view the multinational as a "change agent," a "development agent," a "social movement," and as a "force for international understanding and tolerance." And, in a study that is unique for its scope, Hill and Still (1980), present a systematic analysis of the cultural effects of multinationals.

In an extension of these latter explorations, the basic hypothesis proposed here is that multinational corporations are effective agents of cultural diffusion. D(/]}tsion refers to the introduction into a geographic area of symbolic material which is not properly part of the culture indigenous to the area. Symbolic material includes language, technologies, social norms, religious beliefs and practices, scientific knowledge, and aesthetic, moral, and epistemological values (ideas of what is beautiful, good, and true).

In its role as diffuser of culture, the multinational is the beneficiary of discoveries and technological innovations that have drastically shrunk international space. As a result, the multinational corporation has become a central organization form in the industrialized world. The special cultural and historical circumstances in Western Europe and North America which gave birth to modern science and technology also engendered the multinational (Wilkins, 1974). The technological mentality, predicated on rationality, efficiency, and perfectability, is at the very heart of the concept of the multinational. Thus the multinational is, to a large extent, the product of modern technological innovation, and it is often closely associated with the values of modernity, industrialization, progress, and economic development. It is, at one and the same time, a symbol and an instru- ment, a cause and an effect. Innovations in communicat ion and transportat ionmespecial ly international telecommunications, the commercial aircraft, and the electronic computer--have made possible remarkable growth of the multinational corporation, in both size and geographical scope, over a relatively short period.

Hymer (1972) has called this phenomenon "the law of increasing firm size." The tendency for firms throughout the course of the industrial revolution to increase in size, toward "globalization" of control and coordination, has been analyzed extensively in the management


literature. Following the seminal work of Chandler (1975), this tendency is viewed as illustrative of the practice of the structure of the organization adapting itself to the strategy of the organization (i.e., changing markets and technological innovations--as opposed to the more traditional practice of strategy following structure. The end of the "Pax Americana, "along with the end of the cheap energy and favorable terms of trade for raw materials, has, however, altered the strategy of multinationals far more than their structure. Although these trends have not meant a break with Hymer's "law," they have entailed: (1) the emergence of smaller multinationals in Europe, Japan, and the third world countries, and (2) an increase in nationalized industries with international operations. The point to be stressed here is that as multinational enterprises become more generalized as a way of doing business in a globally interdependent world economy? they become the de .facto primary agents of diffusion, not only of the goods and services resulting from their operation, but also of the very techniques of operations and of their underlying prerequisites and assumptions.

The Concepts ~[D~[[itsion and Assimilation in Trade Theory, Anthropology, Geography, and Communications Theory

Economics and international trade theory have not been in the forefront of international diffusion research. In part, this neglect is due to the liberal economic theorists' rejection of a unified social, political, and economic order. This has yielded separate fields of study for economic processes operating under "natural laws"--primarily the do- main of private enterprise--and for socio-political processes not responsive to identifiable natural laws or harmony and thus viewed as fundamentally irrational.

The well-known two-country, two-commodity comparative cost advantage model of liberal economic thought has provided a convenient theoretical base to analyze trade and investment flows. But is has heightened the tendency to ignore non-economic variables essential to understanding the complex phenomenon of diffusion. A more recent avatar of the liberal economic school, closely related to the field of marketing, is the extenstion of the product life-cycle concept to international trade flows (Vernon, 1966). This product model suggests that many goods (i.e., the manifest content of diffusion) go through an identifiable cycle in which high-income, mass consumption countries are initially exporters, then they lose their export markets, and finally they become importers of the product. Textiles are an example of a


product that has gone through the complete cycle for the inventing country (Britain), the industrialized countries, and finally for less developed countries.

Kurth (1979), in a unique study, considers the socio-political outcomes of the product life cycle. Other disciplines, however, have developed more probing, e x p l o r a t o r y concep t s to fashion an understanding of international diffusion.

Diffusion as such was first identified by A.L. Kroeber (1944) as one of the three sources of cultural change and stability: the other two being invention and tradition. At a particular time in the history of any living culture, each existing belief, practice, and institution can in principle be traced to its immediate (or more remote) origins in one or, more typically, a combination of these sources: either it was introduced via the socialization of individuals (or, more properly, their acculturation) by earlier generations--this is tradition; or it was introduced through the creation of a new combination of previous disparate elements drawn from traditional and/or exotic material--this is invention; or it was introduced from "outside," from another living culture--this is diffusion. Thus, to speak of the multinational as a diffusion agent is to suggest that it is involved in the introduction of cultural material that is neither traditional nor the product of local innovation.

Associated with diffusion is the process of absorption or assimilation. In Kroeber's framework, symbolic material that is diffused does not automatically become an enduring part of a host culture. It can occur that an item is easily assimilated; it can also happen than an item is rejected entirely or ignored outright. More often, the fate of diffused material is less straightforward. In most cases, some degree of assimilation and some degree of resistance are both encountered--resistance that emanates from tradition, from invention, and from competing sources of diffusion. Historical instances of resistance to the assimilation of diffused material have been resolved in many ways (see Weins- tein and McNulty, 1981, for a classification of some types of resolutions). One sort of resolution, documented by students of multinational impact in rural areas of South Asia, involves a "synthesis" of diffused and traditional forms. Morton Klass, in his study of the effects of the opening of a bicycle factory owned by a large British-based multinational in a rice-growing village of West Bengal, concluded that: "The village and the factory now live side by side, if uneasily, and they interact. The factory has changed the village and its community and the factory has changed in response to the values of those who staff it. Neither, it would seem, can ever be the same again" (Klass, 1978:254).


Such observations underlie an important new "two way" emphasis in current diffusion studies (e.g., those of L. Brown (1981) and associates at Ohio State University). In contrast to some of the views expressed by Everett Rogers in his pioneering work (1962), this research (which includes recent revisions by Rogers of his own earlier conclusions) pays special attention to the ways in which diffused items are transformed or, in extreme cases, rejected outright, in the process of assimilation. This gives new and special emphasis to understanding not only the role of the diffusion agent but also the processes of absorption and rejec- t ion-whereas older models made what now appears to be the facile assumption that diffusion agents are ordinarily capable of overcoming any type of resistance. This classic "supply side" bias is an artifact of the scope, purpose, and sponsorship of the earlier studies. But, based on two decades of reflection and research such as that of Klass, it is now clear that diffusion agents cannot simply and at will guarantee assimilation of that which they introduce: agents of tradition are not the passive and impotent sources of resistance they were once believed to be.

Whether and to what degree the assimilation of diffused beliefs and practices occurs depends in part on characteristics of the agent: its size, its economic and political resources, its technical effectiveness, etc. 4 These also depend on conditions in the host country such as the level of economic development and literacy, the vitality of the local culture, the perception held by the host country of the diffusion agent, and the degree of political openness and social pluralism of the system. Just as there are always some "preconditions" to economic development [whether or not they are the ones posited by Rostow (1960)], there are certain prerequisites to a ready and lasting assimilation of difused material, be it symbolic or physical. In this regard, Farmer (1966) has attempted to specify the cultural and social preconditions for the transfer of Western organizational and managerial techniques. He notes that borrowing the technology, managerial techniques, etc., of the West may also require the adoption of the West's class structure: "to fit the neat organizational squares of a Western type factory is extremely difficult (1966:204)" in a non-Western culture. In short, technique is not value- free. It is often part and parcel of a far broader socio-cultural system. In particular the role of multinational corporations, as diffusion agents, is clearly conditioned by such factors.

Multinationals and Other Di#/itsion Agents

A comparison between the operation (and effects) of multinationals and that of other diffusion agents (present-day as well as past) might be


instructive. Since any contact between members of two different cultures is a potential source of diffusion, any participant in such contact is a potential agent (and a potential recipient). In order to be of consequence, however, the contact must ordinarily be more organized and systematic (and less idiosyncratic) than a chance encounter among a few individuals. In this sense, the several key diffusion agencies that have been identified by Kroeber and others tend to be relatively large- scale social formations such as churches and military organizations. This should alert us to a connection between those instances of diffusion which are viewed as historically consequential and the typically powerful character of the agents (though it should not obscure the role that is played in cultural diffusion by less-organized, more casual--but also more poorly documented--intercultural contacts).

Churches and religious organizations have perenially served as diffusion agents. Their missionary work is, in many ways, the very model of a certain type of conscious, planned diffusion. In effect, missionary religious organizations operate in a host region with the direct intent of effecting change in the local culture through the introduction of non- indigenous beliefs and practices. The varied experience of religious organizations with assimilation and resistance can thus serve as useful examples for many kinds of non-religious agencies.

On the other hand, armies and navies are also diffusion agents. They operate, manifestly at least, in a host region for different, more directly instrumental reasons than those of religious missionaries; yet they often exert a stong influence in spreading their home culture in the host society. The dual role of invaders and diffusers, which armies and navies have played, underscores the important fact that much cultural diffusion occurs without or even despite plan or intention on the part of the agent. (And we will return to the general question of intended versus unintended diffusion below.) Other diffusion agents include a range of civilian government organizations (some, such as diplomatic missions, with purposes other than diffusions; others, such as cultural missions, with this as an explicit goal), educational and scientific exchanges, international communication media, and the less-organized but nevertheless collective processes such as large-scale international migration and trade. Together with religious and military organizations, these are the social agencies of what have been and continue to be major sources of cultural diffusion--throughout the world. Con- sequently, they are also the organizations which have experienced the major instances of resistance.

Through history, the roles played by these agents have changed. For


example, religious missions have taken on practical, this-worldly goals and have tended to downplay the single-minded pursuit of converts; armies now have cultural and educational branches which overtly seek to win their special kind of convert. The relative importance of these agents has also shifted, toward the more secular, the more indirect, but also the larger, more formal, and more complex types of organizations. In particular, the once-casual transmission of beliefs and practices that for most of human history occurred as a byproduct of the transactions between international traders and their host-culture clients now, with the rise of the multinational corporation, takes place within the framework of what is arguably the most complex and far-ranging type of organization yet invented.

In a recent study, the historian P.D. Curtin (1984) argues that multinationals have replaced what he terms the "cross cultural brokers" of yesteryear. Typically, these were merchants of a single national origin living in different places and forming a trade network or commercio- cultural diaspora. Cross-cultural trade once was fraught with the dan- gers of association with strangers whose behavior is unpredictable; it required brokers for hosts and their countrymen. According to Curtin, the multinational corporation now bypasses such brokers by establishing a common and systematic set of communications tools and sym- bols. Today, everybody involved in international commerce uses the same computers, jetliners, accounting and financial standards, tele- phones, etc., in relaying messages across the world. [On this see, for example, the nonscholarly study by Pierre van Goethem (1972).] Cur- tin concludes that the regions of the world have gradually developed an "ecumenical" system of commerce somewhat reminiscent of the Ro- man Empire or of the medieval Islamic world.

Between Interdependence And Mtdtipolarity: The "United Nations Model" And The Inevitability ~[ VVorld Government

Multinationals, as agents of diffusion and, ultimately, of cultural change, have had to negotiate their trajectory in the international political economy between two contrasting ideal types. These types, or leit- motifs, run through the global order as presently constituted: on one hand, there is a persistent degree of political multipolarity--tempered and sometimes exacerbated by ethnic conflict and cold-war considerations (see e.g., Hawrylyshyn, 1980); on the other hand, there is an increasing level of socio-economic interdependence.

In the 16th century, a system of values predicated on man's mastery


over the environment through knowledge, power, and wealth began to spread throughout the world. The ancient civilizations of the Americas were annihilated, Africa, Asia and South America were colonized, and North America--and eventually Japan--were integrated into this system. The Industrial Revolution that began in eighteenth century En- gland soon diffused to the rest of the Western world. The European corporate form, as a direct offshoot of the industrial revolution, eventually evolved, as Hymer has noted, into the multinational corporation. For Japan, the international corporate form was the sogo shosha--the giant multinational trading house, which handled both raw material imports and diversified exports. The 19th century thus witnessed the triumph of the domestic corporation as the ultimate form of industrial organization.

The two World Wars of the 20th century coincided with the end of European dominance. In accord with de Tocqueville's forecasts, a new set of internatonal political and economic rules was consecrated in a bipolar world, dominated by non-European superpowers, as the center of geopolitical gravity shifted to North America and the Soviet Union. In the wake of the decolonization movement following World War I! came several changes that contributed to the reshaping of international relations, including: the participation of Western Europe and Japan as middle-range powers, the Chinese break with the Soviet Union, and the advent of the Bandung non-aligned movement and the Group of 77 (with its program for a "New International Economic Order").

In brief, a multipolar and fragmented world of nations has emerged, one whose cleavages are clearly visible along the fault lines of North- South, East-West, and West-West axes. These cleavages have been in- tensified by the gradual erosion of post-World War II international economic relations, predicated as they were on free trade, internationalization of capital flows, technology transfer, an international division of labor with attending population migrations, and a stable exchange-rate monetary system supported by both private and multi- lateral banking institutions. This emerging multipolar world is also characterized by the gradual termination of what Daniel Bell has called "American exceptionalism." It is a world in which nation states and the constraints of territorial boundaries are an abiding reality, but one in which the United States remains a continental giant endowed with tremendous assets for the foreseeable future: agricultural abundance, high technology leads, substantial energy and mineral resource endowments, a strong reserve currency, and - -o f special interest in the present context--corporations and banks with a truly global scope and reach.


In contrast to this multipolarity, we are also witnessing the movement toward a single, interdependent world--a universal culture, predicated on diversity and individuality, flourishing, so it seems, within a world of increasing nationalism. (Toffler has attempted to express these changes in his widely read The Third Wave, 1980). The role of multinational organizations--in particular the multinational corporation--is central to this, still poorly understood, process of global change.

Shortly before his death, Arnold Toynbee (1974) expressed the view that the multinational corporation was filling a vacuum between the antiquated and fragmented system of local sovereign states and the real (but still latent), global economic order. Karl Mannheim, in his reflections on corporations and other large-scale organizations in the post World War II period, offered several insights of immediate relevance. First, for Mannheim, the end of the War meant that the old European and Asiatic empires had reached their limits. By way of compensation, national social institutions were undergoing a process of internationalization which was generating positions of unprecedented influence for those organizations and their elites. Mannheim was among the first social scientists to appreciate the importance of decolonization for the future of the world wide system of economic, political, and cultural networks established by the colonizers.

So long as modern capitalist society was an expanding system with under- developed countries to absorb men, capital, and energies, there always was an outlet for the misuse of power and extreme forms of exploitation . . . [but] imperialism, the cause of recurrent international friction and economic up- heaval, seems to have reached a point of saturation. The world is divided; there are no more open spaces with free homesteads for immigrants, and the back- ward peoples have been awakened through communication with and education by their rulers or trading partners (Mannheim, 1950:9).

In a more normative vein, Mannheim viewed the new international institutions as potentially open to non-elite participation. The pros- pects for this sort of international "democratic planning" depend, for Mannheim, on decreasing income disparity, rising expectations, ease of communication and travel, and mass education.

During the past forty years, and largely in accord with Mannheim's observations, there have emerged what some have called "the institutions of interdependence." At the heart of this international network is the United Nations system and its family of specialized agencies. Whatever the strengths and limitations of the United Nations system, it has been effective in recruiting and eliciting the participation of


people evet3,where. Some would argue that this has not resulted in any sort of equity, as large nations dominate the U.N.O. Others decry what they characterize as the international mob rule now in effect and the overly ideological tenor of debate in the organization (Thompson, 1978). Others note that, despite and often through the U.N.O., the former colonies are still governed--in what Kwame Nkrumah first labeled a "neocolonial" manner- -by elites educated by and beholden to former colonizers. Whatever the merit of these points, the fact remains that today's U.N.O. is a truly supranational participatory organization. In this sense, it provides both an ideal and a reality which have shaped all other contemporary international relations. We have, for example, witnessed the emergence of mini-U.N, satellites whose scope is regional: the Arab League, ASEAN, CEAO, the Andean Pact, the OECD, the Sahel Club, etc. These regional organizations have spawned a complex system. As Armand and Drancourt (1968) describe it, it is as a world "made to order" a la carte, in which individuals, enterprises, associations, and governments constitute items on a menu of international organizational memberships. Thus international relations often appear as a collection of separate, region-bound international organizations rather than an integrated streamlined structure. Such is supranational government in a world pulled by the forces both of interdependence and multipolarity.

The United Nations System has established new international standards of behavior which have diffused rapidly throughout the world, as they have been applied to new, post-war inernational relations among an ever increasing number of sovereign states. As a standard setter of international norms, the U.N. is endowed with a high participatory, non-elite, profile. This contrasts sharply with international norms of the past. In the nineteenth century, standards of international behavior or "civilization" were essentially European standards, to which non- European states, if they wished to join the family of nations, were expected to conform. Turkey, China, Japan and Siam--for example-- all made the necessary adjustments in the late nineteenth century. While they retained some of their cultural identity, they lost much autonomy in international relations (Gong, 1984). Prevailing nineteenth century models of international relations have been widely rejected. The earlier British East India Company model, premised as it was on a colonial framework, is all but extinct today. The Empire model, with its assumptions about imperial sovereignty and manifest destiny, is a thing of the past. the more recent League of Nations concept, a holdover of the balance of power concept, with its emphasis


on international relations directed by a committee of imperial powers, is also largely anachronistic today.

In place of these models, the United Nations ethos of egalitarian international relations--whether realistic or not--is broadly accepted. In part this is due to the fact that many newly independent nations owe their very existence of the U.N., and in part it is because the model is viewed as an antidote to the demeaning premises of earlier models. The model has so much appeal, in fact, that some countries have attempted to apply it to international economic relations: e.g., in the form of a U.N. General Assembly Declaration and Program of Action for the Establishment of a New International Economic Order.

What the United Nations system has rendered possible is something of a paradox: universal standards of law and civilization (however breached) in a world of cultural pluralism. Though weak and insignifi- cant when compared to the ideals of its founders at San Francisco in 1945, a model of world government does exist. It may be, as the Jap- anese saying goes, "only a hair in the universe," but it is with us.

The reality of "world government"--with its paradoxes and limita- t i ons - i s reflected in the reality of world business and, indeed, world culture. Business organizations, scientific and professional associations, and non-governmental organizations operating in a transnational setting (indeed, virtually all organized human activity) now seek more international information and personal contacts. Purely domestic science, purely domestic art, and purely domestic politics no longer exist. Size and complexity are obvious mitigating factors: the smaller the organization, the less likely it is to be affected by international events. The main trend, however, is toward increasing size and complexity. This is especially true of the business organizations functioning in international markets.

Mannheim's concern about non-elite participation remains one of the key problems of the post-war era. How do we reconcile the desire for greater participation--predicated on a U.N. model of international relations--and apply egalitarian standards to large and complex social organizations which are, at the same time, highly dependent on technical experts and centralization for the achievement of their narrow, instrumental goals? Mannheim believed that, if unchecked by con- scientious planning and public involvement, elites would pose a serious threat to the norms of democracy in the present world. However, one need not share his sense of urgency over mass society to agree that the modern complex organization is undemocratic in its exclusion of non-


specialists. In recognition of this, local democratic participation is increasingly sought (and justified) in relation to the U.N. model.

The desire for participation in the activities of more overt contemporary diffusion agencies (e.g., cultural missions, governmental aid pro- grams, scientific exchanges, etc.) is usually expressed as a desire for local input in the goal setting and implementation processes--e.g., host-country participation in the administration and formulation of development aid projects. In the case of less overt and more instrumental diffusion agents, such as multinatonal corporations, the desire--or demand--for local participation is somewhat more problematic. Typ- ically, it is expressed as a desire for local control over corporate policy on wages, prices, labor practices, etc. This sort of participation was, of course, excluded under the older models such as that of the East India Company. As the record indicates, multinationals have generally dis- played a considerable amount of flexibility in tolerating this sort of "meddling" and imposition of restrictions on the part of their hosts?

But the forces represented by the U.N. model of international relations and the trend toward a demassified society pose a more serious challenge to the multinational than such "meddling." Many consider the emergence of a new world economic system to be the inevitable outcome of attempts to reconcile the acknowledged effectiveness of MNCs with the momentum toward participation. Such forecasts are based on the coexistence of diverse cultures, religions, and modes of political governance within a highly diffused world power structure (Hawrylyshyn, 1980). For other commentators, the call for an NIEO is no more than a signal for the plunder of the haves by the have nots to begin. All optimism and pessimism aside, however, the alternatives of nuclear terror balance in perpetuity, total annihilation, world empire, or the disintegration of world order do not leave much latitude in crafting the course of the future.

WHAT IS IT THAT MULTINATIONALS ARE DIFFUSING?

To refer to multinationals as diffusion agents is to focus on their role as transmitters of symbolic material, ideas, values, and behavioral models from one (home) culture to another (the host). Because "symbolic material" is such a broad category, one can identify many different types of diffusion in which multinationals (and other agents) can be involved. Here we wish to set aside the most explicit and manifest types of diffusions in order to understand better those which are relatively implicit, unattended, unmonitored and--from the point of view


of the corporation--the results of acts undertaken with other ends than the achievement of diffusion as such (i.e., latent consequences). Though explicit diffusions are undoubtedly important for the operation of the multinational corporation and for our understanding of its operation, they are arguably less enduring and less essential than the implicit, latent functions (that is, in terms of the effectiveness of the corporation as a diffusion agent, though not necessarily as a business enterprise). In McLuhan's metaphor, we choose to focus on a "medium = message" effect associated with the intercultural contacts in which multinationals paticipate.

Because the explicit "contents" of the activities of multinationals (their technical operations, their technologies, and their direct economic impacts) are under close scrutiny, they are ordinarily subject to conscious resistance, negotiation, and policy (on the part of both the corporation and its hosts). In this sense, a subset of the societal impacts of MNCs are now, and have for some time been, part of the public arena: acknowledged as problematic, subject to partisanship, and-- to one degree or another--regulated. In the terms of diffusion theory, their assimilation is strongly conditioned. It is these that we are setting aside, for the moment at least.

World Standards

A second broad hypothesis proposed here is that, as diffusion agents, multinationals are participants in the transmission of world standards to host populations. In the manner just noted, this process is largely implict.

The word standard refers to the symbolic power of some ideas, objects, and actions to serve as paradigms, as measures against which other ideas, objects, and actions are understood. Worm standards have, by definition, widespread power; moreover, it is presumed that they have precedence over local standards: indeed, their power comes in part from the fact that local standards are judged in their light. Some familiar examples of world standards are the meter, victory or record setting in an Olympic event, and-- in a more subtle and profound sense--The Golden Rule.

All groups and cultures have standards, so defined--and it is likely that the standards of particular groups and cultures (e.g., the North American upper-middle class) are diffused throughout the world by multinational corporations. To stress world standards however is to point to something distinctive about multinationals. For, beyond the


spreading of specifically American or Dutch or Japanese beliefs and practices, organizations that operate as these corporations do (i.e., multinationally) are also involved in the spread of the universal culture referred to earlier. Now, this "universality" is a matter of degree, and, by way of qualification, it is necessary to draw some distinctions among MNCs. In short, not all "multinationals" are truly multinational.

In this regard, the research of Perlmutter (1969) on comparative criteria of multinationality of business enterprises should be noted. Perlmutter argues that the attitudinal orientation of key executives toward "foreign people, ideas and resources"--in headquarters as well as subsidiaries, in host and home environments--is crucial. He, thus, develops three primary attitudinal complexes among international executives which can be inferred from the assumptions that are made about key products, functions, and geographical decisions (i.e., the manifest content): (1) ethnocentric or home-country oriented, (2) polycentric--or host-country oriented,--and (3) geocentric, or world-oriented. An "ethnocentric" multinational centralizes authority at the home country's headquarters. It uses home standards for evaluation and control of persons and performance ("if it works at home it should work overseas"); it identifies strongly with the nationality of the owners of capital; and it tends to recruit and develop people from its home country for key positions everywhere in the world. The internal flow of communications is from the top down. A "polycentric" multinational leaves some control over personnel policy, product marketing, etc., to its local subsidiaries, but it centralizes financial controls. It develops people of the local nationality for key positions in their own country, but it does so in terms of its own domestic standards. It is, in a sense, a loosely connected group of quasi-independent country, but it does so in terms of its own domestic standards. It is, in a sense, a loosely connected group of quasi-independent subsidiaries, akin to a con- federation. European multinationals tend to follow this pattern (Lemaitre and Goybet, 1980). A "geocentric" company is still a rare thing. Its executives do not equate superiority with nationality. They seek the best individuals to solve corporate problems rather than follow a policy of home nationals first. Its nature is summed up in a statement of objectives of Unilever's board chairman: "We want to Unileverize our Indians and to Indianize our Unileverans."

One is tempted to label the general symbolic contents of the more geocentric type of multinational not universal culture but "MNC culture." But this would be inaccurate. The culture does not "belong" to the MNC, it "belongs" to everyone, everywhere who can participate,


wishes to part icipate, or cannot avoid part icipat ing in it. The key point is not that it is the culture " o r ' the mul t inat ional but that the mul t ina- t ional can be a chief, even an essential, agent of its diffusion, and, thus,

of its perpetuat ion. The culture is probably closest to what Redfield

and Singer (1954) referred to as the "Grea t O u e k u m e n e , " or to what

m a n y - - b u t perhaps, most effectively, Daniel Lerner (1958)- -have sim-

ply labeled modernity.

Modernity: Evolutionary or Dffusionary Concept

In practice, modernity has been used by social scientists to refer to a

characteristic o f cultural i tems which are current in " m o d e r n " - - i . e . ,

Western--socie t ies . One useful inventory of its contents makes this

connect ion quite clear (see Table 1).

Table 1. The Elements of Modernity (From Schneider, et al., 1982: 356-57)

1. Specialization of organizations. Bureaucracies increasingly are formed. 2. Emphasis upon rationality or rational operation. Decisions are made on the

basis of what has always been done, although what the forefathers did sometimes continues to have much influence.

3. Centralization of organizations. The work and service organizations are structured by interlocking networks, such as corporations and holding companies.

4. Urbanization. The population becomes concentrated in cities, as do the places of work. Crowding results.

5. Population increases due to better medical technology. The life span increases; there is a lower rate of infant mortality.

6. Changes in family structure and roles. Families living together become "nuclear" (mother, father, and any children) rather than "extended" (including mother, father, children, grandparents, uncles, aunts, and so on). The family is less responsible for formal education of the children, a task assumed by schools.

7. Increase in geographical and social mobility. People move more frequently, often to improve their occupational status, or income level. Rapid and abundant transportation systems facilitate that mobility.

8. Consumption of produced goods. This becomes critical to the economy. Planned obsolescence of products is common. Prestige is derived from the acquisition and consumption (even the destruction) of produced goods.

9. Expansion of communication networks. In time this expansion becomes vast and very rapid, as in television, radio, newspapers.

10. Tendency for social statuses to become more "achieved" than "ascribed." Social position is earned by performance rather than assigned by birth or caste. The achievement motive, the drive to be successful, becomes domi- nant.

11. Emergence of an economy in which capital and the investment of capital become crucial. People can make money, if they have enough, simply by investing it.

12. Emergence of a large number of specialized interest groups and voluntary


associations (e.g., fraternal organizations; civic clubs; political groups; service groups, such as the American Red Cross; lobbies).

13. Greater divergence of life-styles. People can be hippies, conservatives, bikers, organization men and women, suburbanites, straights, and so on. The freedom to elect alternative life-styles, of course, varies for different sectors of society. Also, some life-styles are socially more acceptable than others.

14. Acceptance of change itself. Though there are strong tendencies toward organizational stability, change in organizational structures, even if only cosmetic, is commonplace.

As the concept of modernity came to be applied in the sociology of international relations [e.g., in the work of Lipset (1960), Lerner, and Horowitz (1966, 1972)], it continued to carry this double connotation of something current and something fashionable in the West--or fashionable among influential groups (style and opinion leaders) in West- ern societies. In this field (and others) modernity was contrasted with something called "tradition"--here the work of Redfield and Singer is of great significance--and characteristically treated as polarities in an evolutionary model of change. Thus, as Lerner's studies in the 1950s and 60s well illustrate (and as Gusfield's 1967, classic critique well refutes) sociologists--and others--conceived of modernization as an historical movement away from tradition, in which some cultures (Western ones) became more advanced than others. For many, this movement has a kind of inevitability to it: modernization is something that occurs to a culture, it is a stage to which it evolves, as the outcome of the unfolding of the potentials and limits of tradition.

One implication of this is that all societies will ultimately be mod- e r n - t h o u g h some will achieve it earlier and some more quickly than others--just as all were once traditional. This also implies that, with time, the world is becoming more homogenous: the modernity that makes the societies of England, France, the U.S., and Japan alike in important ways will eventually characterize Algeria, Thailand, and the Andaman Islands as well.

This view that modernity is the inevitable outcome of evolutionary processes has also been challenged with force from a wide range of disciplinary perspectives and ideological positions. Nisbet (1969), Myr- dal (1970), and--as noted--Gusfield stand out as especially effective critics of the evolutionary model. The model, in combination with the idea that "the modern" is that which is up to date among elites of modern countries, has been attacked as ethnocentric and as cultural imperialism from other quarters [e.g., in one version, by Frank (1969),


the dependency theorists, and the world-systems approach]. Clearly, the term "modernity" in its present context leaves much to be desired.

Yet there are some facts which still require explanation regardless of the term we use. The characteristics of "the modern" listed above are typical of Western elites; and, to the (usually considerable) extent to which theirs are egalitarian and participatory societies, they are characteristic of Western people as a whole. Moreover, these characteristics are increasingly present-- i f not fully assimilated--throughout the world. There are few if any cultures in the world today that are not to a significant degree modernized in this sense. Modernity increases its influence, it becomes more universal, it replaced (or at least challenges) the values, beliefs, and practices of the past, but it is also, on the surface at least, a thing of the West.

In attempting to reconcile these facts with the real weaknesses of the evolutionary approach, several commentators have called upon the concept of diffusion. For example, Redfield explained the ubiquitous trend toward modernization without resort to a strict evolutionary model: He argued that traditional areas can become modern through contact with, and the infusion of cultural material from, modern societies.

Without committing oneself to the validity of concepts such as "stages," one can conceive of "the passing of traditional society" not strictly as an evolutionary outcome but rather as a matter of intercultural contact. It is not that modernity "emerges" from tradition as leaves emerge from the buds of a plant, but that it spreads from place to place--from industrial England to imperial Germany, from New York City to Port Blair (capital of the Andamans)--as a film of oil spreads o n wate r .

Two current, contrasting approaches to modernity also treat the diffusion process as central: the world-system school of Wallerstein, et al. and the Innes-McLuhan school in communication theory, noted earlier in a related connection.

The World-System Approach: Strengths

The world-system school, which has acknowledged roots in the work of Fernand Braudel and in dependency theory, focuses on the organized, system-like character of the internationlization of economic forms since the colonial era? According to representatives of this school, capitalism developed and spread from the colonizer, more


modern ("core") areas to the colonized, less modern ("peripheral") areas over the decades and centuries. The point has been reached today at which this system now dominates world economic relations, and its parts and branches dominate local markets and conditions wherever they occur. For world-system theorists, this also means that core interests continue, in "neocolonial" fashion, to control the economic affairs of their own and other nations.

As in Redfield's formulation, for world-system theorists cities have an important function in these exchanges. In Wallerstein's terms they are "nodes" in the system, acting as exchange points connecting core and periphery in the transmission of capital, goods, workers, etc. In- deed, of relevance to world-system theorists and to followers of Red- field as well, most of the major cities in peripheral (ex-colonized) areas were established--as seaports or on other transportation routes--by the colonizers in order to participate in the emerging world economy. As a result, an important set of contemporary local economic norms and practices did not evolve from local traditions. In significant instances--especially for Africanists like Wallerstein, they were im- ported, fully developed from "leader" nations. This recalls Veblen's (1939) concept of the penalty of leadership, whereby previously under- developed Germany achieved and even surpassed England in industrial growth through the importation of English innovations without having to pay for their early development. One must be cautious about such arguments, however, for while English industrialization may have become "part of" German culture, Western capitalism has not become "part of" Nigeria in exactly the same way. And, at present, one would be hard pressed to prove (or to disprove) that, on balance, today's core societies have paid a penalty for their leadership. But Veblen and Wal- lerstein would agree at least on the main point that modern items of great consequence do get diffused to and-- in some way--assimilated into host societies, thus making the host more modern in the absence of an evolutionary process.

The Worm System-Approach." Excesses

It is clear that world-system theory's focus on international economic relations makes it an invaluable resource to bring to our understanding of multinational cultural impact. However, in using this pespective one must also be cautious of its excesses, perhaps especially so now that the approach has become institutionalized as an academic


"field" (complete with its own journal, a Center, and section status in the American Sociological Association).

One such excess is its Manichaean tone. Sometimes quite explicitly, sometimes lurking beneath the surface, as it were, there is in the world- system approach the presumption that world capitalism is a Jugger- naut, loosely controlled by Wall Street and a few industrial barons in Western Europe, which has been unleashed to exploit and to consume the resources of "The Wretched of the Earth" for the benefit of the wealthy few as once did the great empires (but even more effectively and more thoroughly). The world-system, basically unstoppable, forever grinds away at the economic autonomy of masses everyhwere, until? Well, for the pessimists, until we all are destroyed by economic, nuclear, or ecological collapse; for the optimists, until the masses rise up and overthrow the system . . . . Our point is made (or perhaps overly made): there is a strong ideological drift in world-system theory which is populist, anti-capitalist, and--ul t imately--anti-American.

The second excess in world-system theory is a narrowness in its approach. This is somewhat ironic, since most of the critics of world- system theory have expressed concern about its overly ambitious scope. However, there are grounds (including the example of the early work of Wallerstein himself) to wonder if the theory might actually be excessively selective; that its depictions of world relations might be distorted; and, as ideology, that they might be distorted in an oppor- tunistic way--not by falsehood but by what they do not say. Recent revisions of world-system theory [e.g., Skocpol (1979), Petras and Mor- ley (1981)] have, in fact, sought to broaden the referents of the theory to include political conditions (as independent and as a dependent variables)--especially conditions in peripheral (host) countries. Thus, it is now acknowledged that the parts of the system--such as branches of MNCs--are perceived and treated differently in host societies with differing political climates, and that the effects that parts have on political (e.g., class-politics) relations vary from place to place and time to time depending on internal (to the host) relations. But there is even more.

If the concept of a world-system is to be useful, it needs to account for all of the systematic diffusions that have occurred and continue to occur in the wake of colonialism and the rise of capitalism. No doubt, many of these diffusions are economic; but the economic diffusions also tend to be the most explicit, manifest and, thus, the most likely to constitute scrutinized and regulated activities of specifically economic organizations: e.g., technology transfers and labor practices. The estab-


lishment and dispersion of the modern world-system is associated not merely with the diffusion and exchange of economic things; indeed, the well-studied economic exchanges are specific instances of a much broader and more general set of exchanges of social and cultural material. English colonialism and the European empires of the past and Euro-American relations with the rest of the world today were and continue to be responsible for the spread of capitalistic values, practices, and products--to be sure. But they were and still are also responsible for the spread of socialism, Christianity, Western science, European language (especially English), electronic media, blue jeans, and video games. The system is a social system, not merely an economic one.

The persistent identification of the world economy with capitalism, and in particular as Western- or U.S.-dominated capitalism, is another instance of selectivity of world-system theory. To the extent (a great extent we believe) that the modern world-system is truly a worm system, it is capitalistic, socialistic, mercantilistic, traditional, and all of these (and none of these) at once, as befits given situations (see Horo- witz, 1974). The world economy affects alike local economies that are capitalist and noncapitalist, core and peripheral--and local economies in turn affect the system everywhere.

A final caution is needed about the word "Western" as used in this context: strictly speaking the system is not Western, and the material it diffuses--economic and otherwise--is no longer strictly part of West- ern civilization. One obvious reason for this is that Japan, other non- European or North American countries, and the Soviet Union (none of which are universally accepted as Western--though they may be modern) now have significant influence on the operation of the world economy. A less obvious reason is that as the world economic system adjusts to local conditions in peripheral areas the system itself is incrementally, and perhaps often imperceptibly, changed. In this way, the economic and other cultural values and practices of the host enter into the system and diffuse back to the home culture, thence into the world network. This is the process of cosmopolitanization of the world-system: always strongly oriented to core values and beliefs, but no longer in their pure forms.

Thus, while Western-dominated, the culture of the world system is not merely Western, for the diffusions of which it is comprised are two- way diffusions. As it has spread it has also taken on a life of its own, operating in the context of- -and occasionally being shaped by- -a wide variety of local conditions. Wherever it has extended, it has infused a


single set of standards, strongly but not exclusively modeled on the local standards of the modern cultures. For most non-modern people of the world today, one need not strive to become more like people in New York, Paris, or Tokyo to become modern. On need only become more like those in the local capital city--where the world-system has its most direct influence, and the rest will follow.

The Rise of the Global Village

Harold Innes (1950), Marshall McLuhan (1964), and their students have developed a perspective on international relations which in many ways complements those of Kroeber, Redfield, Veblen, and the world- system approach. Their emphasis is on the growth and influence of electronic communications media (in which category we would include anything that stores, processes, and/or transmits information electronically) which have led to the possibility of a worldwide communications network. As they point out, the spread of modernity since the late nineteenth century has been accompanied (as both cause and effect) by remarkable innovations in transportation and communication technologies--largely, but not exclusively, the product of core countries' research and development.

Three features of modern transportation and communications dis- cussed by McLuhan and others, have direct bearing on our present reflections on diffusion of world standards and the internationalization of culture. These are: (1) the ability of transportation and communication to overcome the physical limitations of space, (2) their ability to overcome time, and (3) what McLuhan calls their "tactility." As innovations in transportation and communication have progressed, they have eased the accessibility of places, changing radically the very mean- ing of words like "far" and "near." The world as such is now a com- prehensible entity, at least for those who have access to the technologies that allow them to move through it and around it easily and non- chalantly. Similarly, the capacity now exists for instantaneous communication between any two points on earth. Thus, when we speak of the exchange of cultural material today we are speaking of a process that might occur at or near the speed of light--fast enough to be counted as no time at all in most human affairs. We are obviously just beginning to grasp the social implications of this instantineity, as what was once the seemingly insurmountable obstacle of time becomes a mere variable to be manipulated.

Tactility refers to a characteristic of electronic media which sets


them apart from print or the written word. Written communication is impersonal, indirect, and (using Parson's term) specific. It is the medium of communication most compatible with secondary social real- tions" affect-free, formal ized , and i n s t rumen ta l . Elec t ronic communication, such as that via the telephone, radio, or television is, in contrast, intimate, direct, and diffuse. It is a medium much more like that through which primary social relations are carried out: infor- mal, emotional, and involving the whole person. Strictly speaking, of course, electronic communication is not identical to primary (i.e., "face to face") relations. This is, perhaps, one instance in which McLuhan's characteristic lack of precision has led to some misunder- standing. To deal with possible confusion between primary relations as such and those involving electric media, Janet Abu-Lughod has coined the term "tertiary relations." This concept refers to related interactions in which electronic communicat ions technology--the telephone, video, etc.--intervene between the persons involved. Like McLuhan (but based on a substantially different philosophical perspective), Abu- Lughod suggests that these tertiary relations--transcending as they do space and time--have already had a very significant effect on the uses of urban space and many other aspects of social life in modern urban societies.

The combination of the "tactility" of electronic media, their space- and time-constructing qualities, and the ever greater extent of their spread and impact led McLuhan to suggest that the world is becoming a "global village." That is, like inhabitants of a traditional village, people everywhere are now capable (in theory at least) of communicating with, of "knowing" and of "touching" one another in a primary and very immediate way, regardless of their geographic location. Though the concept of a global village is perhaps too dreamy and futuristic for the tastes of most social scientists, it does underscore a major characteristic of the modern world: namely, that the world is meaningfully viewed as a social whole--as one (undoubtedly very complex and not always rationally articulated) network of social interactions and rela- tionships.

Thus we must today take account of a world communication network when we consider world government, a world economy, and a world culture. Many interesting research questions suggest themselves about ways in which the communication netework might operate in harmony and/or in conflict with these other international systems and with local conditions, although their pursuit would take us far beyond the scope of this discussion.

Weinstein and McIntyre 75

To the extent that it exists, the global village parallels, and in some ways surpasses, world government and world economy in the degree to which it is "Western" dominated. But it is at the same time also one more vehicle for the generation and sustenance of world standards: canons of belief and practice to which people everywhere have increasing access and which, presumably, have precedence over local standards. It is, thus, a significant but ordinarily overlooked feature of the environment in which multinationals operate today.

MULTINATIONALS AND THE DIFFUSION OF WORLD STANDARDS

In carrying out their overt functions as economic organizations under the imperatives of growth in size, increasing complexity, and expanding geographic scope, multinational corporations contribute to and are shaped by this evolution toward world-level society. Their typical structure consists of a world headquarters in a major city (e.g., New York, Chicago, Atlanta, Amsterdam, Tokyo) of a modern society and local subsidiaries in the cities of several--more and less modern--host societies (e.g., Lagos, Bombay, Bangkok, Bogota). This structure creates a situation in which intraorganizational communication is, ipsofacto, international exchange.

The location of headquarters and branches in large cities is hardly coincidental. It is the result of largely conscious collective decisions, made over decades, to take advantage of pre-established points of max- imum accessibility to the resources (labor force, markets, etc.) of home and host countries required for the operation of the corporations. That these home/host connections correspond closely with the "nodes" of the world-system identified by Wallerstein, et al., is historically signifi- c a n t - a n d it makes more credible the argument that the world-system "is" neo-colonialist capitalism. To balance the narrowly economic and anti-Western biases of this argument, however, it is important to recall that the same nodes have served not only as access points for Western economic exploitation but also (1) for the diffusion of non-economic culture and (2) for the (always minimal but now rapidly growing) influence exerted by peripheral areas on the core.

From the broader perspective of Redfield, multinational corporations may be viewed as parts of and vehicles for the spread of urban society--the culture of the Great Ouekumene. The location of headquarters and branch offices in modern cities places them in a strategic role as diffusion agents. The size and structure of MNCs make them potentially highly effective diffusion agents. And the fact that they are

76 Studies in Comparative International Development ] Fall 1986

not explicitly involved in the diffusion of non-economic culture--as are religious missions, cultural missions, and the media--suggests that they are also less likely to encounter conscious resistance, in the performance of this latent role.

The emergence of the multinational corporation as a world-wide force has coincided with several major events in international relations: the formal and final dissolution of the old colonial and imperial systems, the subsequent establishment of "world government," the ar- ticulation of paticipatory, egaliatarian ideals, and the emergence of the global village. Thus, while several types of international economic (and other) relations connecting core and periphery did exist for centuries prior to the end of World War II, none of the previous models--colonial, imperial, or "League of Nations"--has proved to be appropriate to post-war realities: not in relation to the extensiveness and inten- siveness of international relations, nor in relation to the universality of egalitarian principles, nor in terms of the large scale of contemporary international organizations and their activities. One need not go so far as to claim that the multinational corporation has "replaced" or will ultimately "replace" the nation state itself (e.g., simply by virtue of the fact that annual sales of some MNCs surpass the total annual gross national products of some smaller, poorer nations). However, it must be granted that the MNC's scale is closer to that of a nation state than that of the traditional "firm" of micro-economic theory.

As suggested earlier, the implicit diffusions of multinationals occur, in a "medium = message" fashion, relatively unattended and, to that degree, somewhat more easily assimilated. Most generally, the "message" is modernity itself. The standards, to which we refer as forming an important part of the implicit diffusions of multinationals, are thus modern ones that can be informally classed into three categories: (1) technical standards; (2) organizational standards; (3) standards of personal deportment. This ordering is intended to suggest ascending de- grees of implicitness. Since technical standards are closely related to technologies and technology transfer, they are, like explicit activities, subject to great scrutiny. Standards of personal deportment--life style, personal aspirations and philosophy, and "manners"--are relatively remote from official functions of multinationals. Taken together, as they usually occur, these three categories encompass the things which the organizations transmit. They are also the very diffused items with the most enduring impact. 7

An example of standard setting involving these categories, and in which multinationals were the primary agents of diffusion, will illus-

Weinstein and McIntyre 77

trate the point. The "flextime" movement began in 1967 when it was introduced at Messerschmitt-Bolkow-Blohm (the German Boeing). By 1977, about one-fourth of the West German workforce was on one form or another of flextime. Nestle and Lufthansa--two well known European multinationals--took it upon themselves to introduce the system to the United States. Within a few years, some 15 percent of U.S. companies were using it on a trial or regular basis. This innovation, which was diffused by multinationals, has had what will undoubtedly prove to be enduring impacts on important areas of worklife, and it has in turn begun to set new standards of organizational behavior and personal deportment.

It is in the area of technical standard setting--the area of manifest cultural diffusion--that the multinational has been in the forefront. Increasingly, changes are made such that a product turned out by a producer in one country will be compatible with the requirements of buyers elsewhere. In the tractor industry, for example, the technical norms are universal. The trend toward global standardization in elec- trical equipment and chemical process plants is so clear that specifically national characteristics have sharply decreased in importance (see Surrey, 1972:22, 31; Chesshire, 1972).

Buyers' preferences and consumption patterns have also become increasingly homogenized. This is the result of standard setting by multinational corporations, although it also reflects the propensity for emulation on the part of consumers in a shrinking world. In short, the consumption and manufacture of an increasing number of products (though not all, clearly) is not likely to be very different whether it occurs in Conakry or in Atlanta. A global homogenization of products can be seen in the consumption, everywhere, of French wines, German beer, Italian shoes, American records and fast food, etc. The homogenization of techniques and ideas is reflected in patent statistics issued by the national governments that are parties to the Paris Convention. A rapid increase in the number of national patents owned by foreigners is now occurring, which is a fairly good indication that ideas or techniques are being widely diffused.

To underscore the role of MNCs in these sorts of diffusion is not to say that multinationals are always successful in setting technical or other kinds of standards. National resistance, even to technical homogenization, can be acute. For many years a campaign has been waged by mu l t i na t i ona l s co rpo ra t ions th rough the I n t e r n a t i o n a l Elec- trotechnical Commission for a uniform world plug and socket system (familiarly known as the "WHOOPS"). There are currently hundreds


of different plugs and sockets in the world. Naturally, there are all sorts of adaptors, and perhaps the commercial interests of the smaller firms which manufacture adaptors have made it difficult to achieve even a mildly uniform system. Whatever the reason, each country continues to vie for its own system--rectangular pin, round pin, flat pin, 250- volt, 125-volt, etc. This remains a problem despite the fact that national governments started in 1908 to consider a universal system-- this was at the same time that international standardization began. This case illustrates how difficult it can be to impose a technical world standard; but it also helps us to appreciate the recent successes of mult inat ionals--often working outside of intergovernmental networks--in setting broadly accepted standards.

As a multinational does its business in a host country, its techniques, its technologies, its modes of operation, its style (ranging from the lexicon of corporate jargon to the styles of corporate office building), and the behavior and worldviews of its personnel are presented as exemplars. The fact that these techniques and styles tend to become standardized within the confines of single organizations over a wide range of host populations (just as there is also pressure toward unifor- mity between multinationals) renders them sources of homogeneity on a world scale. Thus, the implicit "message": the multinational ways are the standard ways.

Though certainly not a sole source, the multinational corporation is, in this manner, a major contributor to the emergence of world-level culture (which coexists and intermingles with national cultures as national cultures interact with regional subcultures). In this capacity, the MNC is a major element in the current movement to a very high and very special stage of social evolution. That which is the standard in one part of the world today is also likely either to be the standard for the world in general or to be superseded by a higher, non-local standard. Barring nuclear holocaust or environmental collapse, no degree of authentic progress that has occurred in the modern world ever again needs to be regained. Nothing needs to be reinvented, in the usual sense, because cultural innovations now have an authentic and con- crete existence independent of the existence of any particular culture. In the premodern world, the collapse of a culture or civilization meant the immediate loss of all of its symbolic heritage except for those (usually very few) items diffused to other cultures. It meant the loss, perhaps forever, of all of its culture inaccessible to archeological and historical methods. But today the past need never again be recapitu- lated in this manner.


The irony may not have been lost that we have here employed what are, essentially, Marxist concepts: "one world," highest evolutionary stage, and the capacity to preserve cultural material. Yet, they include a prominent role for multinational corporations--"capitalist enterprises." If our hypotheses are correct, then MNCs are indeed a major force today in the creation of something envisioned as the eschatology of dialectical materialism: a single, universal system of economic, political, and cultural relations. To be sure, the multinational corporation is not an unchallenged or unmitigated force. For it is most significant that the multinational's functions as diffuser, standardizer, and unifier are subject to ever better-informed and ever more effective challenges at home and in host countries. But what a powerful vehicle it is for effecting the next stage of social evolution.

The final, and paradoxical, implication of the diffusion role of multinationals bears noting. The standards diffused by the MNCs are likely to prevail even when their products, their personnel, and their very existence are rejected. Here again, the "medium is the message" metaphor seems very useful. A host government may- -as some have done--nationalize an industry in which multinationals participate, it may establish rigid restrictions on the operation of multinationals, and it may even prohibit some multinationals from operating in its home territory. But--with perhaps the tragic exception of Kampuchea-- i t cannot (and ordinarily does not wish to) root out multinationalism. To the contrary, a host country's "nationalized" corporations imitate, to a surprisingly high degree of detail, the form and functions of the multinationals. 8 The products of these nationalized corporations look, feel, perform, and taste very much like those of the multinationals; their corporate life styles and worldviews, too, are reflections of those of multinational personnel. Why? Because the standards of the multinational cul ture--moderni ty--have been assimilated, regardless of the fate of specific actors and organizations; because, at the same time that aversion to the "contents" is expressed, the host has accepted the medium.

So it is not at all strange that economies of every sort have found a way to articulate with the world economy: that multinationals can operate effectively in advanced or undeveloped, capitalist, socialist, or mercantilist economies alike. For all accept, tacitly, the multinational as standard for technical, organizational, and personal comportment.

AND A FINAL WORD FROM THE LAND OF COCA-COLA

In the late 1960s, the Coca Cola corporation was challenged in Peru by a local company, Inca Cola. It was a time of great national pride in


Peru when, in 1973, it was announced that Inca Cola's sales had surpassed those of Coke. In 1977, Coca-Cola and the government of India failed to agree on a modus vivendi, and Coke closed down its operations there. Immediately, several products were introduced to fill the vacuum: the patriotic 77 Cola, the more like "the real thing"--complete with repainted Coke bottles--Campa Cola, Thumbs-Up Cola, etc. In fact, a new persona was introduced to the Indian industrial scene, the Soft Drink Moghul. In 1982, an agreement was made between Coca- Cola and the government of the People's Republic of China for the manufacture and distribution of Coke, "behind the bamboo curtain," as some people still refer to it. One could continue for quite some time, but the point of these homely examples is clear: you can beat Coke, you can kick it out, and you can be in fundamental ideological opposition to it, but you can't get rid of it.

A bottle of Coke (or its imitators) has no redeeming social value. It has plenty of substitutes. It is bad for your health. And, compared to most alternatives, it is very expensive. No one-- in Peru, India, China, or the U.S. "needs" a Coke. Yet, there it is. Coke and all that Coke entails are the products of an exceptionally well developed, state-of- the-art multinational corporation. It is a model of a successful modern corporation, and its "product" (whatever it may be) is an integral part of its modernity. Its styles, values, and its product-type have captured the interest and the imagination of the world, far beyond the conscious strategies of its worldwide marketing program. In fact, to an extent, the acceptance of its styles, values and-- in brief--its standards has been mot enthusiastic and more widespread than its sales.

Of course, it is not just Coca-Cola. Pepsico, IBM, several energy companies, and many other types of organizations have participated in the diffusion of more than they had bargained for. Indeed, this is an increasingly common experience; one which, if our observations are valid, is inherent in the functioning of multinational corporations as such.

N O T E S

An earlier version of this article was presented at the 1984 Meetings of The American So- ciological Association, San Antonio, Texas, August 30, 1984. We are grateful for the comments of Irving Louis Horowitz and Paul Lubeck.

I. For a review of the literature on impacts, see Barnet and Muller (1974), who take a jour- nalistic and jaundiced view of the MNCs; and Vernon (1977), who employs an economic perspective. Also see United Nations (1974:25-57). United Nations (1978), and Yeager ( 1981: especially Ch. 5).


2. For contending interpretations of the future role of the MNCs see Gilpin (1975:37-60), Madden (1977), Galbraith (1978:83-90), and Pdninou, et al. (1978).

3. According to Franko (1975), multinationals are involved in approximately fifty percent of all world trade.

4. For a detailed analysis of the factors that contribute to and/or inhibit diffusion see Weinstein, 1977: part I.

5. This very flexibility does mitigate Mannheim's dire forecasts. In fact, the mass society theorists are largely discounted by current writers, such as Toftler, who speak of the "demassified society"--in which industrial mass society cracks up and in which decentralization of markets and products as well as diversity are the rule rather than the exception.

6. The foundation work in the U.S. is Wallerstein (1974). 7. It should be underlined that American business schools and their overseas affiliates are the

primary diffusers of organizational and work standards. These schools train executives for multinational operations and provide them with a common operational frame of reference, regardless of national cultural considerations.

8. On the "small" multinationals see Agmir and Kindleberger (1977), Kumar and McLeod (1981), and Wells (1983).

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multinational corporations and the diffusion of world standards: a theoretical exploration

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