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Dr JJ
Irani, director, Tata Sons
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:
Uploaded on February 18, 2004
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