11.2 Types of Structures of Global Companies

There are many different types of business operating in the global market. They are similar in many ways, yet different in how they work with local regions, and how they integrate themselves into these communities.

International Company

A domestic company that uses its corporate office to expand into the global market. The company wants to gain access to international markets. The company will adapt its products/services, yet does not change its operation. Example: Honda car manufacturer (most Hondas look and drive the same anywhere in the world).

Global company

This type of company is a multinational company that has control of its operation where its headquarters is established. It might be viewed as a unified whole. They combine all their activities in each country that maximizes their effectiveness in a global manner. Example: Coca-Cola which may be the most famous global brand in the world.

Multi-domestic Company

This company is complex in that it focuses on local responsiveness over global standardization. They take a “local first” approach. They will adapt their products/services to specific regions to address a need in that region. They tend to hire local employees. Example: McDonalds (French fries in North America and Rice in Asia).

Transactional Company

This company works to balance the global and local responsiveness. They use a network structure (like a cob-web) that coordinates efforts. These companies may also be called multinational companies (not to be confused with multi-domestic companies). They have their headquarters in the country of origin, and branches in other countries used to increase the size of their operations. The country of origin controls the activities of the branches. However, the branches have local responsiveness. They are generally huge companies with centralized control. Example: Amazon (a network enterprise)