The Global Corporation: The Decolonization of International Business

The Global Corporation: The Decolonization of International Business

The Global Corporation: The Decolonization of International Business

The Global Corporation: The Decolonization of International Business

Synopsis

The globalization of business has ended "corporate colonialism" in international commerce, and out of this has emerged what the author calls the "global corporation." Differing in many important ways from the now obsolete "multinational corporation" it is replacing, the global corporation is actually a network of independent entrepreneurs, liberated from the control of headquarters, and thus able to implement a new vision of the overall enterprise, its competitive strategies, and how it coordinates and communicates within itself. The author carefully delineates the subtle distinctions among concepts that are often taken, mistakenly, as synonyms for globalization, such as multinationalization, and elicits the implications these distinctions have for the management of international business.

Excerpt

Globalization, the increasing integration of world markets, has radically changed the rules of the game for international businesses, especially for the electronics industry which is more affected by this trend than any other industry. As consumers become more demanding and competition intensifies, the conventional competitive strategies of low cost, good quality, and marginal product differentiation will no longer be sufficient to succeed in the global market.

To be successful in the global market, a corporation must anticipate change rather than respond to it. In particular, a corporation must understand the difference between global standard and local standard. A local standard applies when a corporation in a remote location has a preestablished way of running its business, its own accounting system, rules, and regulations, products that cater to local consumer preferences, and preestablished business practices. By contrast, a global standard applies when a corporation with a global presence has a flexible way of running its business, taking into consideration the diversity and complexity of local markets. In short, the success formula for a global corporation is flexibility and continuous adjustment of the ways it conducts its business.

To attain this flexibility, international businesses must radically transform themselves from a hierarchical, parent subsidiary structure, where decision-making authority is concentrated at the main . . .

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