Globalization

Global Organizations

International businesses have been around for a long time. Siemens, for instance, was selling its products in many countries in the 19-th century. Ford Motor Company set up its first overseas sales branch in France in 1908. By the 1920s, other companies, including Fiat, had gone multinational. But it wasn’t until the mid-1960s that multinational corporations (MNCs) became commonplace. These corporations – which maintain significant operations in two or more countries simultaneously but are based in one home country – inaugurated the rapid growth in international trade.

The expanding global environment has extended the goals of MNCs to create an even more generic global organization called the transnational corporation (TNC). This type of organization doesn’t seek to replicate its domestic success by managing foreign operations from its home country. Rather, decision making at TNCs takes place at the local level. Nationals typically are hired to run operations in each country. The product or marketing strategies for each country are uniquely tailored to that country’s culture. Nestle, for example, is a transnational company. With operations in almost every country on the globe, it is the world’s largest food company, yet its managers match the company’s products to its consumers. Thus, in parts of Europe Nestle sells products that are not available in the USA or Latin America.

Many large, well-known companies are moving to globalize their management structure more effectively by breaking down internal arrangements that impose artificial geographical barriers; this global type of organization is called a borderless organization. The borderless organization can be said to approach global business from the geocentric perspective. For instance, IBM dropped its organizational structure based on the country and reorganized into some industry groups.

Managers of multinational, transnational, and borderless organizations have become increasingly global in their perspectives and accept the reality that national borders no longer define ways of doing business efficiently and effectively.

Notes:

replicate – повторять, копировать

impose – навязывать

artificial – искусственный