and its cost casts a long shadow over future plans and future capital investment. Because it is so important for the United States to develop a comprehensive energy plan, the failure to do so dramatizes all too vividly the ineffectiveness of our political institutions in dealing with a problem of this complexity on a timely basis. The political process seems geared to turn out only short-term, expedient answers where the situation demands long-term solutions. Representative government must find ways to deal with critical problems by anticipating them rather than relying on crises to catch the public attention and to mobilize public support. ECONOMIC NATIONALISM The sixth area of concern to businessmen is the trend toward rising economic nationalism, which manifests itself in unfair and discriminatory treatment of foreign investment and in increasing restrictions on the free flow of goods and services across national boundaries. Free trade and the free flow of investment across national boundaries have been major factors fueling economic growth and development since the Second World War. In some industries, U.S. firms are finding it difficult to compete, particularly against foreign producers that have available to them the cooperation and resources of their governments. Those troubled industries have found a potent political ally in organized labor in the U.S. which has reversed its former stance and is now pushing protectionism. Pressures from adverse balance of payments, restrictions on flows of investment and trade, together with the dislocation of economies resulting from the change in energy prices, suggest that it may become more and more difficult to maintain relatively free trade and to transfer the necessary capital and technology from those who have it to those who need it. DURABLE, COMPLEX, FAR-REACHING PROBLEMS These six areas of concern have certain characteristics in common. First, the problems are likely to be durable, not temporary nor easily solved. Secondly, these problems are interdependent and extremely complex, linked to one another, acting and reacting, sometimes difficult to understand and even more difficult to explain clearly. Thirdly, for the most part their solutions lie beyond the control of the private sector. Government is the central player and, depending upon the issue, other stakeholders in the system consumers, environmentalists, academics, et al may play critical roles. Finally, the economic and social consequences can be far reaching indeed. Business will not be measured by the bottom line alone. Business will be called to account for the social conse- quences of its acts. This is a reasonable expectation, but there is grave danger that business and the free market system can be sentenced to death for crimes they did not commit. There is a curious ambivalence among those interviewed in the Stanford Research Institute study between their pessimism about the system as a whole and their optimism about the future of their own company. While they feel a certain amount of helplessness in their ability to stem the general trends, they have confidence in their ability so to manage the affairs of their own corporation as to survive and to prosper. They do not expect their control over the corporation's future will increase, but they do have faith in their ability to understand the changing environment and to adapt to it. Changes in management style are already underway. And this, I think, may be our salvation. THE NEW MANAGEMENT STYLE In devising strategies to cope with the new conditions of the 80's, chief executives in the United States start with the premise that it is necessary to create a new level of business acceptance and legitimacy that is attuned to the socio-political demands of the 80's. Managements are moving from a posture of simply reacting to external forces to a mode of anticipating the issues and even helping to shape the issues. The first step is redefining the role of the chief executive officer to recognize that it is imperative that much of his time and attention must be devoted to externalities. It is now the chief executive officer and not his assistant who is personally involved with his peers in high-level business groups, such as the Business Round-table in the United States where business is working collectively and often effectively to influence governmental policy in ways the traditional trade associations never could. The chief executive also personally meets with groups that influence thought and opinion. Educators and even their students are high on the list, for academia is the spawning ground for many of the ideas good or bad that are being considered politically. The chief executive speaks out publicly more frequently, writes more often. He no longer considers his constituency limited to shareholders, employees, and customers. Today he is the company's chief public relations officer. He is still the boss, but necessarily he must rely on others to perform the company's routine management chores while he copes with the externalities. There is also a changed corporate organization designed to improve the monitoring of social and political change. The legal and external af- "The record shows that, with few exceptions, the national interest is best served in both mature and developing economies by the free flow of investments, goods, and services across national boundaries." 3