Some brands seem omnipresent. Today’s consumer can board a plane, travel to the other side of the planet and still find the same fast food chains, movies, clothing and perfumes waiting for them at the other end of their journey. Indeed, global organizations are ubiquitous – they probably made your breakfast cereal this morning (Kellogg’s), brought you to work (Toyota) took you from the elevator to your office (Kone) and will make your lunch at the canteen (Sodexho). In this chapter we explore the challenges which flow from managing global organizations.
The firms that own these brands face a particular challenge since they must balance the desire to serve local tastes and interests with the consistency needed to maintain a global brand. For those managing a global business issues such as labour regulation, currency fluctuations, political change, transportation costs and any number of other concerns create challenges which must be overcome in a way which balances the requirements of local circumstances with the needs of the wider global organization. Today some businesses are “born global” (Madsen & Servais, 1997)whilst others have achieved global status over time.
Both McDonalds and Skype are globally recognised brands yet their histories are very different. McDonalds has grown from a single restaurant in the 1950s to serving millions of customers via a network of 36,000 outlets globally today. The process of expansion has been relatively slow and steady when compared to global telecoms firm Skype which is a good example of a “born global” firm. Most “born global” firms share some common features. Their management team has an international orientation, the firms are typically active in international markets at, or at least close to, foundation and they often start life as small, self-financed businesses focusing on a particular niche. Many such firms, like Skype, can achieve global reach through the use of technology. Whilst McDonalds is technologically sophisticated in many ways, the fact that it delivers physical products means that to internationalise it needs a presence in each market that it wishes to serve.
Even looking at one location it is clear that we operate in an increasingly international world. Fast food may seem like a relatively simple product but this would be deceptive. The burgers or pizzas that we find on our high streets may be international because they are provided by a global chain or franchise. However, they are also likely to be international in that they will use ingredients sourced from many countries. Flour from one, onions from another, meat from yet another. Almost nothing that we consume at any volume is exclusively locally sourced. Our challenge then is how best to manage organizations with a global footprint?
|Title of host publication||Introducing Management in a Global Context|
|Number of pages||14|
|ISBN (Print)||978-1-910158-47-0 Hbk, 978-1-910158-48-7 Pbk|
|Publication status||Published - 1 Sep 2015|
|Name||Global Management Series|
|Publisher||Goodfellow Publishers Ltd|