THE LANDSCAPE OF GLOBAL BUSINESS Chapter 4 Lecture 1

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THE LANDSCAPE OF GLOBAL BUSINESS Chapter 4
Lecture 1
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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

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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)

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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

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Note from SAGE is this image integral?
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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

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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

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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

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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.

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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

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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

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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