THE LANDSCAPE OF

GLOBAL BUSINESS
Chapter 4 Lecture 1

Why are Global Businesses

Important to Us:
Economy

is about $40 trillion

2003 Snapshot of the Global 500
$13.729 trillion in revenues
Businesses will employ many of you
You doubtless want to work for a
good business

What are Business

Categories of Global
Enterprises?

Global Giants

Public ownership
Private ownership

Small to medium size firms

Family owned
Public ownership
Global Start-ups

(Other global enterprises include global

nongovernmental organizations, intergovernmental
organizations, and global gangs or terrorist groups)

Global Giants

Global Brand giantscan be public or private, but due to brand

awareness, they usually are fairly well monitored by the press
These are many of the firms we are studyingcheck
Interbrand or AC Nielsen for ratings
Usually are from advanced economies, but developing
economies are trying to buy or build global brands, e.g.,
Haier
Hidden giantscompanies whose activities are not in the public
eye, e.g., cement, building materials, insurance companies, food
production, machinerywe also study these because life is not
all brand glamour
Some are not in the public eye because we dont care
Some are not in the public eye because the parent company
does not want us to know
Ben and Jerrys is owned by Unilever
Coca-Cola owns Odwalla
General Mills owns Small Planet Foods

Note
from
SAGE: is
this
image
integral?

Here are Global Firms, Who

Owns Them?
B. Husky Energy
E. Euro-Disney
F. Johnnie Walker Scotch Whisky
G. Gerber Baby Foods
J. All-Clad Metalcrafters
K. VP Schickedanz

Small to Medium Size

Companies

The definition of what constitutes small and medium

size varies (making it hard to compare worldwide)
Also can create a global brand (but usually a single
brand in a single industry, e.g., Dr Martens)
Also can be hidden champions
Can be a global start-up
Logitechfounded by people from different
countries, headquartered in two nations, to serve a
global market
Often depend on entrepreneurial behaviors

Brands and Society

Brands satisfy human needs for belonging and satisfaction
In nations where standards are low, brands provide assurance
of product quality
Brands also raise public awareness about firm behavior and
mediating organizations motivate many
To pursue social and environmental responsibility within the
firminternal adaptation mediated by NGOs like
Greenpeace
To address issues that occur outside the firmexternal
adaptations that make firms mediators for others even as
others mediate these issues for them
Suppliers treatment of employees or ways they extract
raw materials
Some go on the defensive
Some focus on values and proactive efforts

The Bottom Line on Global

Firms
Whether large, medium or small
Whether public or privately owned by
families or by shareholders or by the
government, etc.
All contribute to and are challenged
by characteristics of globalization.

Among Challenges Relevant to

Your Studies, Consider the
Effects of

Diverse participants in the industry studied

Stakeholder and owner activism
Individuals and institutional

Competing models of how to manage globally

The Anglo Saxon model is more hands off and
encourages shorter run profit motives
The Rhine model is cooperative and encourages
more social engagement for firms

We do Not Know the

Outcomes, but We do
Know:

These challenges are altering firm

management such that nations are
adopting practices from other settings
Asian collectivism accommodates revised
social contracts, e.g., layoffs
Anglo Saxon traditions are revised to
separate the CEO from the Board
The Rhine model experiences pressures to
generate shorter term profits

As a General Statement
We Can Say:

Corporations worldwide are under pressure to

consider themselves
Members of a dynamic community
Linked by networks of interdependent teams
Composed of self-managing people with diverse
characteristics and talents
Guided by shared purpose
Leaders committed to continuous learning and
improvement
In service to maximum long-term customer satisfaction,
employee and shareholder enrichment, and the health
of the larger society