The section on process identifies the “three c’s” of process -

co-ordination, co-operation and communication. A process

orientation rather than a functional orientation is identified as
crucial to achieving customer value. The IBM experience has
identified three crucial processes for all firms, which are itemised.
Readers of LRP will be disappointed that ‘developing vision and
strategy’ and ‘managing improvement and change’ are merely
identified as optional extras.
The section on technology seems underplayed; a brief overview
is given of some emerging IT technologies. Stress is laid on work-
ing with partners for strategy and technology, jointly developing
new value propositions and competencies (it goes unspoken that
IBM is a potential partner!)
With the waves of technology currently breaking at manage-
ment’s door, the text emphasises the importance of an early
warning system identifying strategic threats and opportunities -
an important part of most companies’ strategic management
today.
The final part of the book is about leadership, picking up on
Peter Senge’s theme: “the critical roles of leaders: designer,
teacher and steward.” You will find many more comprehensive
texts on leadership, but this brief section does give a flavour of
the new leadership, exemplified by IBM’s own experience under
Lou Gerstner.
To summarise, this is a book rooted in 1990s thinking and a
readable overview, of interest to strategists that won’t involve
you in the detail. Companies working seriously to this recipe will
surely do better financially than most. But they will need to move
beyond this for the true success of being part of sustainable busi-
ness ecology.

Barry Hopewell

doi:10.1016/S0024-6301(02)00153-X

Globalization and its Discontents

by Joseph E. Stiglitz, Norton, New York (2002), 282 pp., $24.95
This is a controversial book by a Nobel Prize Winner in econom-
ics. In the book, Stiglitz endorses the popular criticism of glo-
balization and launches into an extended attack on the current
policies of the International Monetary Fund and the World Bank.
He argues that these international institutions are not succeeding
in reducing world poverty or in helping the growth of developing
nations; rather their market-based policies worsen the situation.
As a former chief economist at the World Bank, there will be
some expectations of useful insider analysis of these international

654 Book Reviews and Review Briefs

institutions. Sadly, this is not provided as the book lacks any solid
analysis or even balanced insight with its unrelenting criticism of
globalization.
The book is a polemic. It is well written, free of academic
jargon, except for the repeated discussion of information asym-
metries and their applications to monetary policy and the
efficiency/distribution dichotomy. Yet the polemical writing
comes at the expense of substance. For a distinguished econom-
ist, Stiglitz makes a succession of lightweight and debatable
points including a simplistic criticism of globalization as having
failed to end world poverty. The IMF is alleged to have worsened
the Asian Financial Crisis, prevented Russian development and
to have created poverty and inequality in Africa and Asia. Inter-
national institutions are blamed for their market-based,
efficiency-first views, but local dictators and corrupt govern-
ments are not analyzed as the more likely causes of poverty and
misuse of external loans. Probably this reflects the experience of
Stiglitz at these institutions and his lack of insight into corrup-
tion and government maladministration as he flew around on a
world tour of key political and economic trouble spots. In other
words, Stiglitz is the typical visiting expert who meets the leaders
on their best behavior but fails to see what is really going on.
The weakest part of Stiglitz’s book is his brief discussion of
foreign direct investment and multinational enterprises. Here, no
knowledge is displayed of the vast literature on the theoretical
and empirical analysis of the performance, operations and stra-
tegies of multinational enterprises. When Stiglitz says that foreign
multinationals quash local small business (p. 68) he displays
ignorance of empirical and case studies of the benefits of net-
works, joint ventures and supply chains in international business.
When he says that the abuse of strong local competition policy
results in monopolies and that local workers are displaced, he
wrongly criticizes multinationals instead of the corrupt or inept
local governments. In fact, the evidence of international business
researchers suggest that foreign multinationals help to offset local
monopolies, transfer technology, stimulate growth and improve
the efficiency of developing countries. But for Stiglitz ignorance
is bliss and ill-informed criticism of multinationals can be
launched without any regard for the actual evidence on their
performance and behaviour.
In fact, Stiglitz does not address most of the real issues in
globalization; besides the lack of analysis into multinationals
there are no data on world income inequality, trade and develop-
ment, the causes of economic growth, etc. Instead, his book is
really a technical critique of policy at the IMF in the 1990s. He
criticizes the high interest rate and tight fiscal policy applied as
conditions to IMF loans to countries experiencing currency
crises. He also attacks IMF and World Bank conditions favoring
privatization before the institutions and legal frameworks were
in place to make markets work. This is a reasonable point and
growth, indeed, has been poor in countries like Russia, but not
so bad in Asia. Thus his criticisms are really over financial timing

Long Range Planning, vol 35 2002 655

 and loan mistakes rather than a tight case against globalization.
Indeed, Stiglitz has little evidence to back up his criticism of
globalization. He appears to have been opportunistic in even
using the word globalization in a technical book about IMF pol-
icy. Even his prescriptions for the future are weak, for example,
in Chapter 9 two key reforms are called for:

1. improvements in global governance (where this really

means reducing U.S. influence at the IMF)
2. greater transparency (this means less power for technical
bureaucrats other than Stiglitz).

In short, Stiglitz is not really as critical of international insti-

tutions as the rhetoric implies. His real villain is the power of the
United States to push its alleged free-market ideology through its
control of the IMF and influence at the World Bank. In addition,
U.S. ideas are said to be institutionalized in the senior bureauc-
racy of these Washington-based economic agencies. Finally, the
U.S. Treasury is also too free market and pro-Wall Street for
Stiglitz’s liking, and he sees it as the root cause of U.S. free-
market policy.
All of this is far too simplistic, as economists at the IMF will
perform in much the same way as economists anywhere, regard-
less of nationality. Where Stiglitz has a much better point is in
his discussion in Chapter 6 of U.S. ‘fair trade’ laws on anti-
dumping and countervailing duty actions. Here I fully agree that
these are basically protectionist laws, captured by the domestic
U.S. industry lobbies, giving, in practice, a form of adminis-
tered protection.
Overall, this is a vastly disappointing book. Stiglitz is a liberal
intellectual who is good at pure theory but bad at applied eco-
nomics. His theoretical insights on market imperfections are
valid, but his criticism of international institutions is badly mis-
placed. What is the alternative to the IMF and World Bank? Even
more poverty? How can they be reformed to emphasize more
equitable global governance without compromising their focus
on efficiency? A reallocation of internal resources at these insti-
tutions may be needed, but a recommendation to radically
reform these institutions is a misguided and naive viewpoint.
The book will add to the negative literature on global capitalism
propagated by anti-global activists. Its level of insight is actually
slightly above the average for such works, but is well below any
minimum standards of academic objectivity and scientific
research.

Alan M. Rugman

doi:10.1016/S0024-6301(02)00154-1

656 Book Reviews and Review Briefs