GLOBAL People Management and Development Professor H. Michael Boyd, Ph.D.

Marquardt, Michael J and Engel, Dean W., Global Human Resource Development, (Prentice Hall, 1993) –ISBN –

THE GLOBAL CORPORATION

Professor H. Michael Boyd, Ph.D. What exactly is a global corporation? An organization that has fully and globally integrated its operations—product design, process design, manufacturing, vendor management—in many parts of the world. For example, Honda, a Japanese auto manufacturer, has a fully integrated operation in the United States for producing the Honda Accord Coupe. One that has the ability to optimize marketing, purchasing, people, engineering, and manufacturing activities worldwide. A global organization is one that has become an "insider" in any market or nation where it operates and is thus competitive with domestic firms operating in local markets. However, unlike truly local firms, the global corporation has a global strategic perspective with a capability for local differentiation. Global corporations search the globe for the best opportunities available, place investments around the world to achieve the highest return at the least risk, purchase materials wherever in the world they are the most economical, produce components or finished products wherever in the world this can be done most effectively, and market the product or service wherever in the world it can be done most profitably. A global organization does not have a single country bias. The successful global firm, although globally integrated, can respond locally and be sensitive to cultural differences relative to the needs of customers, the political and economic environment, and values of local workers and clients. Learning in a global organization takes place in both a global and local context, encompassing global as well as local knowledge, attitudes, and skills.

Professor H. Michael Boyd, Ph.D. Certain industries have globalized earlier than others, including: Telecommunications Chemicals Electronics/ComputersTransportation Finance and Insurance Automotive PharmaceuticalsConstruction

Professor H. Michael Boyd, Ph.D. Global corporations may be small as well as large, and headquartered anywhere in the world In the 1990s : Among the 500 largest industrial corporations, –157 were American, –150 were Japanese, and –161 were European.

Professor H. Michael Boyd, Ph.D. WHY CORPORATIONS Go GLOBAL 1.Increased foreign competition in their domestic markets 2.Expanded free trade policies such as the European Common Market and North American Free Trade Agreement 3.Improved telecommunications and information systems that allow instant decision making and transfer of data 4.Better utilization of company personnel 5.Lowered transportation costs and time 6.Increased global customer bases 7.Worldwide financial systems with access to the global money markets that allow for utilization of foreign capital, tax advantages, the opportunity to diversify risks, and the ability to profit from foreign exchange fluctuations 8.Opportunities for larger profits due to economies of scale in production, logistics, and marketing 9.Ability to earn additional income on existing technology 10.Increased product/service life cycle 11.Opportunities to gain an edge in reputation and credibility 12.Access to foreign technology, skills, knowledge, capital, and human and natural resources