HONG KONG (AFX) - Sam Palmisano, head of IBM, called on multinationals to evolve into a

new type of corporation if they are to avoid an anti-globalization backlash that leads to the election of governments hostile to the interests of big business.

The IBM chairman and chief executive wrote in today's Financial Times that traditional multinational companies (MNCs) need to abandon their approach to operations outside their home country.

He cites as examples the way General Motors, Ford and his own company built factories in Europe and Asia but kept all the research and development in the US.

Instead, he argues they need to move towards full global integration of their operations to stop the current unease about the forces of globalization turning into an all-out assault on big business.

He said the danger for MNCs that fail to change their thinking is that countries will elect political leaders who impose draconian labor regulations or try to constrain free trade.

'The alternative to global integration is not appealing: left unaddressed, the issues surrounding globalisation will only grow... People may ultimately choose to elect governments that impose strict regulations on trade or labor, perhaps of a highly protectionist sort,' he writes.

'These decisions are not simply a matter of offloading non-core activities, nor are they mere labour arbitrage -- that is, shifting work to low-wage regions.'

The IBM chief's decision to go on the offensive comes less than a week after he announced plans to invest 6 bln usd in India, highlighting the latest step in the company's efforts to shed its multinational structure.

He said traditional MNCs were designed to deal with the 'protection and nationalism' that held sway in the 20th century. The modern company, he wrote, is a 'globally integrated enterprise' which spreads its strategies, production capacity and management around the world in order to be close to markets and customers.

'The globally integrated enterprise is an inherently better and more profitable way to organise business activities -- and it can deliver enormous economic benefits to both developed and developing nations,' he wrote.