A dozen years ago, Peter Drucker predicted what multinational corporations of th e future would look like, saying that

they were going to be held together and con trolled by strategy rather than defined by who owned them. There will still be ownership, of course, Drucker wrote in Managing in the Next So ciety. But alliances, joint ventures, minority stakes, know-how agreements and co ntracts will increasingly be the building blocks of a confederation. Last week, Druckers vision came into full view. Bo Andersson, a Swede who served as a top executive at the American auto giant General Motors, was nominated to b ecome the first foreign president of OAO AvtoVAZ, Russias biggest car maker, in a nticipation of its takeover next year by a French-Japanese alliance of Renault a nd Nissan. (If you werent counting, that was five different countries mentioned i n the preceding sentence.) Anderssons rise neatly captures the trends. AvtoVAZ tapped the 58-year-old indust ry veteran nine months or so before the Renault-Nissan deal is scheduled to be c ompleted. The Russian government will retain a minority stake in the venture. Renault and Nissan hope to revive AvtoVAZ, which has seen demand shrivel for its once-ubiquitous Lada, a boxy contraption long the butt of one-liners. (My favor ite: What do you call the shock absorbers on a Lada? Passengers. Another: What d o you call a Lada driver who says he has a speeding ticket? A liar.) The vehicle s built by the reconstituted enterprise will be decidedly more Western in their look and feel, feeding a sensibility that Drucker believed was at the heart of o ur shrinking world. Globalization is not an economic event; its a psychological phenomenon, he observed . It means that all of the developed Wests valuesits mindset and expectations and a spirationsare seen as the norm. This idea crystalized for Drucker when, in 2001, he was visited by an old studen t of hisa native of Taiwan who was then working in Shanghai. Whats the most importa nt thing that has happened in China the last three to five years? Drucker asked h im. The same is true in Russia, which analysts expect to pass Germany and become the largest car market in Europe. But exploiting such opportunities requires a part icular set of skills that many companieseven big companieslack. For example, there is a need to choreograph the actions of an ever more complex web of global suppliers, extracting value at every turn. Knowing the cost of your operations . . . is not enough, Drucker wrote in Management Challenges for the 2 1st Century. To succeed in the increasingly competitive global market, a company has to know the costs of its entire economic chain and has to work with other me mbers of the chain to manage costs and maximize yield. Andersson, who oversaw worldwide purchasing for GM, is especially well suited fo r this task. While at the Detroit company, he earned a reputation for his master y over the details of a vast supply chain, as he pushed for more and more accoun tability from GMs parts manufacturers. When an executive from one of them offhand edly accused Andersson of sucking his suppliers dry, he responded by donning a v ampire costume. But Andersson is far more Drucker than Dracula. For the past four years, he has spearheaded an impressive turnaround at Russian truck maker GAZ Group. He began by taking the necessary step of cutting tens of thousands of jobs (no simple thi ng in a country with a strong Communist legacy) and more recently started offeri ng employees generous incentives (through a profit-sharing program). But while t hese moves have depended on a keen grasp of local politics and culture, Andersso n has also kept an eye on the international scene, with GAZ becoming a contract

assembler for GM, Volkswagen and Daimlers Russian subsidiary. Drucker saw this balancing act as a hallmark of business todaythe need to operate in both a global world economy and a splintered world polity. Finally, Andersson insists that all of his operations are truly first-rate, or a re at least moving in that directionanother trait that Drucker deemed essential. No institution can hope to survive, let alone succeed, unless it measures up to t he standards set by the leaders in its field, anyplace in the world, Drucker wrot e. This is true particularly in manufacturing. . . . Performance below the worlds highest standards stunts, even if the costs are very low and even if government subsidies are very high. At GAZ, Andersson modernized factories, improved logistics and had his workers t rained in the latest production techniques. At AvtoVAZ, he is sure to do the sam e. If he rejuvenates the companyand its a good bet that he willyou can then forget all those old Lada jokes. Andersson, the globetrotter, will have had the last laugh .