Roughly 15 participants, including executives from companies such as IBM, General Motors and Whirlpool, discussed a variety of challenges facing business with operations spread around the world. These included striking a balance between standardizing processes worldwide and allowing for local variations; overcoming resistance to reforms; changing company culture; and preserving corporate values in settings that test them.

Even so, there are ways to ease the globalization load. Conference participants shared a number of strategies for success, such as building support for worldwide initiatives by distributing tasks to various regions and making face-to-face meetings a priority in managing remote teams.

Brad Boston, Cisco's chief information officer, suggested that despite new technologies like Internet video conferencing, old-fashioned physical gatherings are needed to build a certain level of trust. He shared an aphorism that summed up the point in terms of pheromones. "Every once in a while, you've got to sit down and smell 'em," said Boston, who holds two of his quarterly staff meetings outside the United States - one in Europe and one in Asia.

Offshoring and the Backlash
The conference took place as companies are placing greater emphasis on international operations. With improved communications technologies, it has become easier to work collaboratively across continents. In addition, emerging markets in countries such as China and India are seen as key growth opportunities for various industries, including information technology and financial services. In addition, wage differences between developed nations and places such as India and the Philippines make sending work offshore attractive including white-collar tasks such as computer programming and accounting.

Of course, the "offshoring" trend has sparked a backlash, with critics claiming it not only costs the United States good-paying jobs but also threatens the country's long-term technological leadership. In the recent presidential race, Democratic candidate John Kerry took up this cause vigorously, arguing that he wanted to end laws that encourage firms to export jobs. George Bush's victory in the election has taken some of the political edge off this issue, but the anxieties sparked by service jobs moving offshore still persist. Defenders of offshoring and globalization generally say the practices ultimately improve the U.S. economy and workers, and that protectionist measures will result in lower economic growth and higher unemployment.

In any event, big companies expect the global economy to play a big role in their future. A recent survey by publisher Dow Jones & Company of 18 of the world's largest companies found that "growth in China" ranked first as the factor expected to have the biggest positive impact on their businesses in the next five years. In addition, 84% of respondents predicted most of their growth will come from international markets rather than domestic markets.

But making that international growth a reality will not be easy, participants at the summit made clear. One of the challenges they discussed centered on choosing to build international operations organically, acquire other firms or form partnerships. Linking with fast-growing partners can be dicey, said Robert Fulmer, visiting business professor at Pepperdine University. The same company that can help you in the short run can turn out to be a competitor, Fulmer argued, likening the partner to a baby tiger. "The first year, the baby tiger is great for catching mice," Fuller said. "The second year, you've got to watch out for it eating your children."

Balancing Uniformity and Customization Another difficulty is figuring out the extent to which company policies and methods ought to be uniform. A standard set of processes around the globe can lead to leaner operations; but tailoring company methods to specific cultural, political and economic conditions in different markets can be critical to winning business there.

One rule of thumb is to require that 80% of a company's operations be uniform, while letting regional offices customize the remaining 20%. But that formula is too simplistic, participants argued. Local offices should only be able to create novel processes when it puts them ahead in the market, said Geoffrey Moore, managing director of consulting firm TCG Advisors and author of books including "Crossing the Chasm." "Innovation is extremely expensive," Moore said. "You only want to differentiate when you have competitive advantage." Cisco's Boston shared the sentiment. "What's not valuable," he said, "is having a different way of coming up with commissions in every country in Europe, which is what we had before."

Budget control can enforce global standards throughout a company, said Mark Hillman, information technology director in charge of global supply chain at General Motors. Hillman recommended that companies not allocate money for software development to regional managers. Central IT managers alone should have that budgetary authority. "Until you hard-switch that thing over, you're just doing pretty slides about globalization," Hillman said.

Smart ideas can come from the outposts of a company, said Edward Granger-Happ, chief technology officer at non-profit humanitarian group Save the Children. Granger-Happ gave the example of a Save the Children field worker who created a desktop application that proved useful for the organization. "We need more headquarters humility," he said.

In addition, local managers can voice serious objections to policies or initiatives handed down from headquarters. Several years ago computing titan Hewlett-Packard tried to centralize a number of functions but ran into resistance from regional executives, said Artur Landwehr, HP vice president of sales operations. HP responded by turning over the responsibility for creating worldwide processes to regional teams. "Suddenly the regions were in a situation where they couldn't just say no," Landwehr said. "They had to come back with a solution." HP's "distributed development" approach not only pushes regional managers to think about other parts of the world, but allows for experimentation, Landwehr said.

Challenges of Corporate Cultural Reform
Resistance to making a company more global doesn't necessarily come from far-flung offices. It can rear its head at the central headquarters. Cargill, a conglomerate involved in activities ranging from making mayonnaise to asset management to steel trading, has come up with a novel equation to capture the challenge of corporate reform. Cargill's CIO Rita Heise told participants that D times V times F must be greater than R, where D equals dissatisfaction, V stands for vision, F refers to first steps and R means resistance.

Cargill is attempting to shift from its legacy as a commodities provider to a company that offers more comprehensive "solutions" for customers. But its sound performance is making the transition more difficult, Heise said. "We're trying to create dissatisfaction," she said, "because we're coming off some successful years."

One aspect of a company that may need to change for it to succeed globally is its culture. During the conference, Moore suggested that company cultures tend to fit into one of four quadrants characterized by the terms cultivate, competence, control and collaborate. Prototypical firms in the respective categories, Moore said, were Google, Microsoft, IBM and Hewlett-Packard. Participants generally agreed that global companies need a fairly high level of collaboration. That means firms or company divisions that have emphasized individual or team achievement defined by hitting performance numbers - competence and control features have work to do.

Understanding the existing corporate culture is a vital initial step, participants said. But even then, it can be painful to transform a company's way of doing things. James Haymaker, vice president of strategy and business development at Cargill, noted the company's traders stand to lose business in the short run by spending more time collaborating with others. "When do they walk away from the trading desk where there's huge money to be made - and walk over to build a services organization?" Haymaker asked.

Changes in company culture also can require difficult changes in personal identity. For example, sales professionals with personalities attuned to individual achievement may find it hard to adapt as a company demands more teamwork. Jim Shimp, lead director of global development for global information systems at Whirlpool, suggested that individuals in such a transition develop a more flexible sense of self. He noted that he himself is a "thinking introvert" when it comes to personality type, but must on occasion behave in a different way. "Do you have the skills to step out and play the other roles when appropriate?" he asked.

Still another challenge in doing business globally is handling ethical dilemmas. Participants noted that in many countries, corruption is commonplace. If it isn't possible to do business in an ethical way, Cisco will walk away, said Ron Ricci, vice president of corporate positioning at Cisco. "We just don't play ball there," he said. Wharton's Henisz challenged Ricci on this point. He noted that Cisco sells network equipment to China, which in turn sometimes blocks access to certain information on the Web. Cisco in effect is complicit with China's violation of free speech, Henisz suggested. "There's a difference to us between that and kickbacks," Ricci responded.

Henisz argued that corporations wanting a global system of free trade should get involved in politics. Public fears about offshoring in the United States could result in trade restrictions, Henisz said. To help alleviate worker anxiety, he suggested, companies should push to expand a federal program that helps some workers displaced by trade. "If you don't address people's concerns, the political system will," he said. Henisz said the economic benefits of free trade are clear. But Cargill's Haymaker wasn't so sure. He said the gap between the lower sectors and the rest of society is widening. "There is a real issue out there," he said.