Global Corporation

Global Corporation is a large company that operates in many different countries. Global corporations in a sense are multinational corporations having many units operating, in overseas countries. They operate in two or more countries and face many challenges in their quest to capture value in the global market. A global company is generally referred to as a multinational corporation (MNC). An MNC is a company that operates in two or more countries, leveraging the global environment to approach varying markets in attaining revenue generation. There aren’t many companies in the world that can boast of having a business presence in every major country. The main reason for any business to exist is to increase sales and profits.

Its difference with multinational corporations is that global corporation’s units operating in overseas markets do not usually have autonomy as the MNCs units. Instead, the operations of the global corporation’s units are controlled by the home office. These companies operate much like a domestic company except that they view the whole world as their market place. The potential for expansion for businesses increases as they enter into more markets. This allows businesses to reduce dependence on their local and national economies.

Advantages

  • Multinational corporations provide an inflow of capital. Most multinational corporations have their headquarters in the developed world. They rely on the resources of mature markets to maintain their supportive revenue streams.
  • These corporations reduce government aid dependencies in the developing world.
  • These corporations allow countries to purchase imports. The issue of economic development in non-developed countries is an overall lack of resource access.
  • These corporations provide local employment. Multinationals come in, offer higher wages (which are still low compared to global standards), then shift the standard of living.
  • These corporations improve the local infrastructure. Companies must have employees who can access job sites to become productive.
  • These corporations diversify local economies. Many communities, developing countries, and economies all rely on primary products for subsistence.
  • These companies create consistent consumer experiences. Consumers trust these businesses because they understand what the value proposition is for them before they ever walk through the doors.
  • These corporations encourage more innovation.
  • These corporations enforce minimum quality standards. Most multinationals rely on vendors for their distribution work.
  • These corporations increase cultural awareness. When companies expand overseas, they become exposed to new cultural realities.

Disadvantages

Multinational corporations create higher environmental costs.

  • These corporations don’t always leave profits local.
  • These corporations import skilled labor.
  • These corporations create one-way raw material resource consumption.
  • These corporations encourage political corruption.
  • These corporations support “sweatshop” labor.
  • These corporations remove jobs from their home country.
  • These corporations build legal monopolies.
  • These corporations put other companies out of business.