In earlier chapters, we painted broad pictures of the issues in the world system, in multinationals' headquarters and in national government. By standing back far enough from the action, we could see some patterns in recent behaviour. But, as when looking at an impressionist painting, the image blurs as one approaches the canvas. So, too, when observing activity at the grass-roots level, the sense of order dissipates. Local managers are pulled in different directions by the multiple forces acting on them. Their behaviour is conditioned by the demands of their corporate masters and of the local bureaucracy; and by the need to build robust human systems capable of harnessing and developing local skills and resources. What patterns of behaviour as exist are to be seen more at the level of the individual firm than within industries. In this chapter, we examine the interplay of the first two influences, leaving the human side of the argument to the next chapter.

Among the many ways by which corporate strategy affects local managers, two stand out as being of prime importance. The first arises from the shifts towards global strategy that raise the costs of staying in the business. Because, as we showed in chapter 3, seemingly similar firms hold contrasting views on how risks and opportunities are measured, they respond differently to the growing need to focus on ‘core’ activities. Many industry leaders are now finding they have to shed activities that made sense in earlier years of expansive diversification.