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The study supports the existence of a relationship between components of CEO compensation and firm performance. On average, the sampled firms can be characterized as having high levels of CEO cash compensation and high ROE, as well as high levels of stock option values and high market returns. These between‐firm effects suggest the existence of labor market norms linking executive compensation with firm performance. CEO cash compensation was also strongly influenced by CEO age and firm size.

External globalization drivers have been proposed to influence the degree of internationalization occurring in industries (Yip, 1989). Industry globalization drivers, when used in conjunction with firm‐specific global strategy levers (Bartlett & Ghoshal, 1995), provide the bases for obtaining competitive advantage. However, the relative importance of the various drivers of globalization varies across industries. Further, the presence of each driver in different countries may also vary. This paper proposes that the interplay of these two factors impacts the investment decisions occurring in different industry sectors across different countries. The case of investments of the U.S. automobile, computer, and petroleum refining industries in the ASEAN region is used to illustrate the argument. The main proposition in this paper is that U.S. firms need to undertake more investments in the ASEAN region from a global competitiveness standpoint independent of traditional market‐ or resource‐drivers.

Matching Porter's (1980) three generic strategies appropriately in each of the four arenas of hypercompetition is proposed to offer temporary competitive advantages. The longer‐term sustainability of these competitive advantages is argued to depend on matching the firm's resources/capabilities with the provision of customer value and needs, as well as the presence of isolating mechanisms in the industry/market environment. Stringing together a series of such ephemeral advantages can enhance the firm's competitiveness in the long‐run.

The purpose of the paper is to discuss the new realities of global rivalry which has been elevated to include economic competition between nations, in addition to the more traditional forms of competitive interactions between firms.

The Introduction section discusses the changes that global geopolitics and the economy have undergone from the end of the Second World War to the present time. The 11 macro‐economic factors that have impacted international business over this time period are then discussed. The next section of the paper discusses the nature of the new relational assets of firms, their locations, and the means of harnessing and utilizing them in knowledge‐based economic competition. A series of propositions relating to the nature of these assets, how managers of corporations can access them, the roles and skill sets required of these managers, and the competitive advantages these assets provide, are then presented. The Conclusion section explores the impacts of these global economic changes for national governments and government bureaucrats, for managers of international firms, for their roles, perspectives, and their skill sets.

These changes have modified the competitive landscape at the level of competition between nations, across industries as well as between firms. These changes have necessitated modifications in the roles, training and skills required on the part of government bureaucrats and managers of international companies. New roles and skills are needed to meet these challenges.

The paper has implications for competitive advantages of firms as well as nations. Executive education and training programs for managers may need to be restructured to provide these managers the required perspectives, skills and knowledge that will equip them to compete and be effective champions of their companies, and also to some extent, ambassadors of their nation states.

The paper offers a new way of thinking about competition and competitive advantages.

Recently some of the most significant work in competitiveness studies has investigated the human side of economics. Concepts such as trust, fairness, and justice have emerged as important components of the healthy functioning of businesses, for both national and multinational corporations (MNCs). In fact, it may well be the case that MNCs have taken the lead in this arena. Ethical and religious issues are most clearly highlighted when cultural differences come into play. A corporate monoculture does not need to examine closely the basic propositions, which all its members share—or are assumed to share. But when a corporation must take into consideration the differing needs and expectations of many of the members of its corporate family, it can, and in fact must, begin to reconsider some of the basic premises upon which that corporation was founded or has been operating. This is manifestly a healthy situation, not only for the new “family members” when, through growth, acquisition, or merger, a national corporation becomes multinational, but also for all members of the original business.