Many U.S. companies have become global players. The technology giant IBM employs over 375,000 people and has revenues of roughly $95 billion. Although IBM’s headquarters is in Armonk, New York, the vast majority of its employees (more than 70 percent) actually work outside the United States. IBM, like many other U.S.-based multinationals, now earns the majority of its revenues (roughly two-thirds) outside the United States.87 Though IBM revenues have been dropping in recent quarters, its global business is still a major focus for the firm.
1. Given that traditional U.S. firms such as IBM have over 70 percent of their employees outside the United States and earn almost two-thirds of their revenues from outside the country, what is an appropriate definition of a “U.S. firm”?
2. Should IKEA be considered a Swedish firm with less than 6 percent of sales garnered from the Swedish market? Discuss why or why not in your groups.
3. Is there any special consideration a firm should have for its “home country”? Is it ethical to keep profits outside the home country in offshore accounts to avoid paying domestic corporate taxes?