A corporation, to be considered truly global, must possess certain key attributes. It must have a global reach; it must be instantly recognisable in global markets; it must have global finance at its disposal and it must be staffed by representatives of a global population. Its products should have global appeal and it should meet the aspirations of global communities. Its stakeholders too should be a global community. Unless all these criteria are fulfilled, no organisation can claim to be a global corporation.
It must be remembered that globalisation is not just the sum of individual parts; it is not enough for a few companies in the group to demonstrate global competitiveness. The whole corporation must display a global presence. The Tata group is a fine example of a national corporation, largely restricted to the Indian subcontinent for the first century of its existence.
Liberalisation, however, prompted the group to go global. Currently, only TCS is truly global in its reach and application. Other companies such as Tata Tea and Indian Hotels have created opportunities to reach out globally. Major companies such as Tata Steel and Tata Motors are known in certain international markets and have a global reach as far as their products are concerned. But they are not truly global in the larger context of globalisation.
There are other things that distinguish a truly global corporation. There must be a seamless movement of people, processes and technology across all the locations in which the corporation operates. There can be no geographical or racial boundaries. Each part of a global corporation must have access to the other units across the globe. There must be a feeling of belonging to the greater whole.
The advantage of a truly global corporation is its ability to move its products, monies and its skilled people quickly and efficiently to those areas where they are most required at a given moment of time.
Another advantage is the leveraging of financial strength across geographical boundaries. The availability of appropriate finances at the right location and time is a tremendous advantage for multinationals and crucial in making a corporation globally successful. Investments in one region might require a considerable outlay of money and if that region cannot provide it, the global corporation has the advantage of leveraging its financial strength from other areas of the world where it has already built up reserves.
A global company can also emerge relatively unscathed in times of political upheavals. It has the advantage of being able to relocate its finances and products to other regions during such times. Later, when political and social conditions stabilise, it can return to the area, which it had temporarily vacated. Coca Cola and IBM withdrew from India in the 1970s, when it was not conducive for them to carry on business here, only to return to the subcontinent two decades later when the business environment improved.
However, not all companies that do business outside their home countries can be classified as global. A corporation that spreads its products and people across national boundaries may be termed transnational. Such corporations are strong in one particular country or region and are trying to break out of the regional bias. On the other hand, a global corporation is not strong in any one particular country. Its employees, like its operations, are spread evenly across the regions of the world.Other articles on globalisation: