Types of Global Companies

It is a global economy indeed; however, can multinational companies act internationally across transnational borders?

In the book Managing Across Borders, by Chirtopher Bartlett and Sumantra Ghoshal, the authors explain the key differences between multinational (MNC), global, International and transnatinal companies...

Multinational Companies

The multinational or multidometic organization offers a very high degree of local responsiveness. It is a decentralized federation of local businesses, linked together through personal control by expatriates who occupy key positions abroad

Global Companies

Global organizations offer scale efficiencies and cost advantages. With global scale facilities, the global organization seeks to produce standardized products. It is often centralized in its home country, with overseas operations considered as delivery pipelines to tap into global market opportunities. There is tight control of strategic decisions, resources, and information by the global hub.

International Companies

International companies have the ability to transfer knowledge and expertise to overseas environments that are less advanced. They are coordinated federations of local businesses, controlled by sophisticated management systems and corporate employees. The attitude of the parent company seems to be parochial, fostered by the superior know-how at the center of the organization.

Transnational Companies

Global competition is forcing many businesses to shift to a transnational model. This organization combines local responsiveness with global efficiency and the ability to tranfer know-how better, cheaper, and faster. The transnational company is made up of a network of specialized or differentiated units, which focus on managing intgrative linkages between local businesses as well as with the center. The subsidiary becomes a distinctive asset, rather than simply an arm of the parent company. Manufacturing and technology development are located wherever it makes sense, an there is an explicit focus on leveraging local know-how in order to exploit worldwide operations.