The World's Best Global Companies

By Shepherd, Bill | Global Finance, September 1999 | Go to article overview

The World's Best Global Companies


Shepherd, Bill, Global Finance


Economic historians like to argue that trade and capital flows were more global in the late 19th century, a laissezfaire era that came to an explosive halt with World War I. Yes, barriers and other government interventions were virtually nonexistent. But capital took a week or more to cross the Atlantic-and much longer to reach Asia. The capital exporting countries were chiefly Britain, France, and the Netherlands; the hot emerging markets were the United States, Japan, and Argentina. Trade was, by today's standards, minuscule. Corporations were tiny.

Cut to the eve of the millennium. More capital now zips electronically around the world in a day than moved in a decade when steamships hauled money in trunks in the late 1800s. Multinational corporations now bestride the world in ways never before imagined. Some have operations in 100 or more countries, sell products in as many as 200, and boast global revenues larger than most countries' GDP Corporate managements can share best practices in a twinkling from New York to Bangkok or jet in troubleshooting teams from Buenos Aires to Seoul.

"The dramatic improvements in communications mean that you can be a truly global company but not act in a clumsy or bureaucratic fashion," says Douglas Cliggott, chief US equity strategist at J.P Morgan Securities."You can be nimble.And that's a recipe for success."

Who are these colossi of the 21st century? To help bring the new era into focus, Global Finance has compiled short profiles of the best global companies in 20 industrial sectors. Winners range from such obvious contenders as Coca-Cola, McDonald's, and Eastman Kodak to a few surprisessuch as the Netherlands' Ahold, which is building a global empire in supermarkets, or Houston's Enron, the leader in the fast globalizing field of providing electricity.

Others are catching the global bug. Dow Jones in mid-July (one step ahead of archrival FTSE International) unveiled its Global Titans index, 50 multinationals with an average of 40% of revenues from outside their home country. "With no national borders to define their territories," said Michael A. Petronella, managing director of Dow Jones indexes, "they defy traditional asset categories."

Companies in the new Dow index are those with the largest market capitalizations. The Global Finance 20, which span a broader array of industries, were chosen based on how well each company is managed, its impact on competitors, and its return on invested capital as well as the extent of its global reach. Only five companies are on both lists: Coca-Cola, Microsoft, General Electric, BP Amoco, Ford Motor. Another sign that companies are becoming more global is the fact that more and more are abandoning organizational structures based on economic regions (Europe, Asia, North America, Latin America) and restructuring along global product lines. Consumer product companies, such as McDonald's or Coke, have standardized production and distribution but still customize their products to local tastes. Companies that serve other multinationals, however, are under increasing pressure to provide the same products and services anywhere in the world. …

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