DIFFERENCE BETWEEN GLOBAL AND MULTI-NATIONAL COMPANIES

MULTI NATIONAL COMPANY

1. Multi National Company is a corporation or enterprise that manages production

or delivers services in more than one country. The first modern Multi National Company

is generally thought to be the East India Company. Very large multinationals have

budgets that exceed some national GDPs. Multinational corporations can have a

powerful influence in local economies as well as the world economy. Multinational

corporations play an important role in international relations and globalization. In

Pakistan there are 47 multinational companies. Multinational companies have

investment in other countries, but do not have coordinated product offerings in each

country and are more focused on adapting their products and service to each individual

local market.

2. A multinational organization uses a decentralized approach to its subsidiaries or

businesses around the world in terms of operations, resources, and, often, marketing

decisions as well. A global company, on the other hand, while it also has locations in

multiple countries, has created a single company culture with shared resources,

processes, and marketing strategies.

3. Moreover, Multinational Company is involved in the manufacture of goods and

services in two or more countries. It is also known as an international corporation or

company. Its headquarters is located in a certain country which is called its home

country, and it has offices in several other countries called the host countries where it

also operates. It must adhere to the policies of the host countries and adapt its products

to cater to the needs of the host countries.

4. Some of the multi-national companies operating in Pakistan are as follows:

a. Unilever

b. Proctor & Gamble

c. Nestle

d. Chartered Bank

e. Siemens

f. KFC

g. Toyota

h. Pepsi Cola International

i. Mobilink

j. Mc Donalds

GLOBAL COMPANIES

5. Global companies have investments and presence in many countries. They

market their products through the use of the same coordinated image/brand in all

markets. Generally one corporate office that is responsible for global strategy. Some

examples of Global Companies are as follow:

a. Apple

b. Microsoft

6. The terms "global company" and "multinational company" may seem like the

same thing, but they have very different features. However, people use global company

and multinational company interchangeably so much that people often assume these

terms are synonymous.

DIFFERENCE BETWEEN GLOBAL AND MULTI-NATIONAL COMPANIES

HISTORY

7. When man created a way of communication to deal with each other during the

early times, trade was also developed. It started with the barter of goods and services;

exchanging what they have in excess for those things that they need but don’t have.

When the population grew, and with man’s invention of the things necessary for his

existence, money was invented which made trading more efficient. With this came the

expansion of trade from being between people in the same place to trading with people

from other places as well. Today, the world is one global market where companies from

certain countries have offices and production plants in other countries. These

companies are referred to as multinational corporations and as global companies. In

informal circles, a global company and multinational company both refer to a company

that operates in more than one country. Before the 20th century, a global enterprise was

one that operated in one country and traded in the far reaches of the world. For

instance, the East India Company was one of the largest companies in the world and

operated out of Britain from the 1500s to the 1700s. However, the East India Company

primarily traded with Asian countries, such as China and India.

PRACTICAL USE

8. Political scientists and economists do not have a standard definition for a

multinational company or global company, according to Iowa State University. For

instance, one theory suggests that a company only becomes a multinational company

when it has owners from two or more countries. Another test requires company

executives to come from a mix of nationalities. In practical terms, people tend to call any

company that sells products or services on the global market or have operations in

several countries a multinational or global company.

ACADEMIC DIFFERENCES

9. Guilherme Azevedo, political scientist at Pontifícia Universidade Católica do Rio

de Janeiro, identifies a multinational company as a transitional state toward becoming a

truly global company. A multinational company has decentralized operations with little

communication amongst divisions. In addition, the local community affects the

multinational business's marketing strategy. For instance, McDonald's has

establishments in dozens of countries but its menus vary depending on the culture. In

Israel, McDonald's serves a kebab on flatbread rather than the hamburgers seen in the

United States. A company becomes a global enterprise when it integrates all of its units

and focuses its marketing strategy on worldwide scale. For instance, a global software

company would sell the same operating system in all countries, but make a few

changes to the program to account for foreign language speakers. Homogenizing a

product line as much as possible allows the company to keep costs low by selling a

larger volume of a certain good.

CONSIDERATIONS

10. A business trying to transition into the global economy should employ people that

understand the culture into which the company plans to expand. Global companies

often offer the same product in different countries, but translate or modify a product's

logo and packaging to meet local tastes. A company trying to globalize should also

reorganize its management structure and supply chain. An export management

company can handle restructuring in the supply chain and compliance with laws of

foreign countries.

11. A multinational organization uses a decentralized approach to its subsidiaries or

businesses around the world in terms of operations, resources, and, often, marketing

decisions as well. A global company, on the other hand, while it also has locations in

multiple countries, has created a single company culture with shared resources,

processes, and marketing strategies.

12. It can be argued that very few companies operate strictly globally. The best will

actively think about which pieces need to be global and which local. For example,

technology-based companies such as our Syngenta client, leverage technologies

globally, because the crops to which those technologies are applied do not care about

country borders. However, regulations and commercial markets are very local, so the

go-to-market strategy must be adapted to each country or region. You might have a

global active ingredient for a pesticide or genetic structure for a seed, but national or

local brands, government approvals and permits or labels, and commercial strategies.

13. A global company or corporation, on the other hand, is an enterprise or company

which is also involved in trade relations with other countries. Unlike MNCs, global

companies do not have official headquarters, and they are composed of autonomous

units which are parts of one parent or global company. Each unit in a certain area or

country handles their individual concerns, and the parent company handles concerns

which involve the overall global company. Like MNCs, they hire the local workforce, but

they usually pay local workers a higher salary.