You wake up one Monday and read in the newspaper that your employer intends to move its corporate headquarters to the Middle East. How is the rest of your day looking?
Undoubtedly, some Halliburton shareholders and at least some of its supporters may endorse the much-maligned government contractor and oil drilling firm’s plans to swap Houston for Dubai. But, amid mounting criticism by Democrats among others, the controversial move may spark a Congressional probe.
“My office will be in Dubai, and I will run our entire worldwide operations from that office,” Halliburton’s Chief Executive David Lesar declared at an energy conference in Bahrain on Sunday. “Dubai is a great business center.”
In the early reaction, the national media has overlooked an important angle, in my view: what about Halliburton’s 106,000 employees? On the bright side, there is air-conditioning in Dubai. But I don’t suppose that the United Arab Emirates affords the same protections and freedoms that American workers, especially women, enjoy now. According to Wikipedia, in the United Arab Emirates, “Salary structures and treatment based on nationality, sex, age, and race rather than on qualification are common.”
Repatriating corporate headquarters is a fairly uncommon move. Yet, in many ways, Halliburton, ranked No. 122 on the My Global Career 500, is an anomaly, given its recent transgressions against American taxpayers. Halliburton faces a major sandstorm, and not just from politicians, in pursuing this goal.
For that reason among others, it’s hard to see how repatriating corporate headquarters is likely to become a trend. Yet, what if some countries offer tax breaks, not just for establishing “captive” company-owned operations (as they do now), but for senior corporate executives to relocate both themselves and corporate headquarters? If Halliburton pulls this move off, it raises the stakes for all countries to retain large employers. But it also puts pressure on lawmakers to enact rules designed to prevent companies from expatriating themselves in the interests of a tax holiday or to avoid regulatory scrutiny.
And what does the future hold for Halliburton workers?
I am surprised that a website promoting a flat world is opposed to the moving of a corporate headquarter to Dubai. Would the reaction have been the same if they were moving to Paris? Having been to Dubai numerous times, (and with more reference points than a quotation from Wikipedia), I believe that in the end it is simple ignorance or more subtle xenophobia that is underlying the opposition. Everyone treats people differently, but Dubai is among the most cosmopolitan cities in the world – even for women. Working in the flat world does not mean it is the same everywhere. Transnational firms are no longer citizens of one nation but free to move as markets demand. Wake up! The world is changing, economies are moving, and the USA will NOT be at the center of the change in the coming decades. Halliburton’s move makes exceptional strategic sense as future major construction projects will be in Asia; though it will be politically unpopular in the short-term.
No one questions whether Dubai is a modern city replete with global job opportunities. By some measure, I am sure that Dubai is more cosmopolitan than many other cities in its region. But I believe you overstate your point about its cosmopolitan suitability for western women. I don’t see all corporate relocations as the same – do you?
My point is really about the need for introspection on the part of those who reject the viability of a corporate move with knee-jerk one-sided responses that have little to do with free market capitalism. Should a multi-billion dollar firm reject a strategic decision for its shareholders because of short-term political or gender-based motives? How tenable is your assertion that it’s hard for qualified, foreign women to work in Dubai? (Have you actually been there? I am not saying its as easy as the US, but neither is Japan for working women.) Similarly, how tenable is it for someone to assert that the Dubai ports deal is a violation of US sovereignty while allowing a British firm to own the ports? I think being in a flat world means being willing to live with cultural differences that allow your individual rights to work in a ‘foreign state’, without imposing your desires on the rest of their society. Why should all corporate relos necessitate a similar set of societal standards that the expatriate is used to? In a global economy, no one is forcing anyone to live anywhere – make a generous offer and I am sure that an overwhelming majority of your executives would love to live in a place like Dubai. I have met Western men and women who absolutely LOVE living there – do the research on the number of British executives and celebrities buying property there. If they choose not to move, then the firm can accomodate executives in mutliple parts of the world. This issue of relocating people is a perspective that has little to do with the strategic decision to move a firm’s HQ for long-term shareholder value. Don’t wish to have a prolonged debate – just a request for the naysayers to spend some time in rational introspection.
Knee-jerk, one-sided responses aside, didn’t Lesar characterize the move as “symbolic?” If anything, this announcement raises the issue of whether or not corporations even need a headquarters in the flat world (for anything other than tax purposes).