Why - and How - Companies Must Go Global (page 1 of 2)

Speaking at a Global Business Forum organized in New York City's Metropolitan Club on April 3 by the Lauder Institute and the Lauder Institute Alumni Association, Parsons described how just as changes in transportation and communications led to regional and national markets in the last century, transformations in technology are now leading inevitably to a global market that will be served by large, global companies such as Time Warner. "We've gone from a place where 200 years ago your market was where you could walk in a day, to a place where your marketplace is the whole globe," he said.

Explaining the rationale behind the Global Business Forum, John Buggie, president of the Lauder Institute Alumni Association, said: "We recently founded the Lauder Institute Alumni Association (LIAA) as an independent organization dedicated to serving the professional and social needs for all Lauder Institute alumni worldwide. LIAA acts as a platform for leaders who plant seeds rather than fight fires and serves as a catalyst for soft power in shaping the global agenda. Our organization will offer more thought provoking events programs and activities like today's Global Business Forum. Today, we are pleased to have over 30 CEOs and captains of industry, foreign policy makers, world class media experts, professors, entrepreneurs and leaders among leaders who will debate key global business issues, identify trends, and exchange ideas alongside our Lauder alumni during six panels and two keynote sessions. If you or any Lauder Institute alumni want to get involved, approach one of our volunteers and let us know your interests."

Parsons brings a unique perspective to global business issues because he has spent, as he put it, "more than 35 years wandering in the business wilderness." Before becoming the CEO of Time Warner in 2002 and chairman of the board in 2003, he was the company's chief operating officer in charge of its content businesses -- Warner Bros., New Line Cinema, Warner Music Group and Time Warner Book Group. He joined Time Warner in 1995, before which he was CEO of Dime Bancorp, one of the largest thrifts in the U.S.

Better communications and transportation have largely eliminated distance as a constricting factor for business, according to Parsons. "It always amazes me when you're traveling in Japan, and they have less than 24-hour-old langoustines from Scotland on the menu...There is no place you can go in the world where you can't get almost anything from any other part of the world," he said. "Business has to scale up to meet the demands of this global market. The scaling-up process is ineluctable."

Parsons noted that technological advances, the emergence of global markets and the relentless drive for growth have critical implications for managers, and they are also driving the trend towards consolidation in the media industry. "In the past, there were three sources of television news -- ABC, CBS and NBC. Now we have Fox, MSNBC, and several other broadcast and cable channels, and we also have the Internet." Parsons pointed out that as media consolidation has gathered momentum, huge debates have raged in the government about whether media should consolidate. "The answer, though, won't be found in government but in the market."

Parsons used New Line Cinema -- a Time Warner company that made the "Lord of the Rings" trilogy -- to illustrate how the need for scale is changing the media business.