Globalization & Foreign Companies

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Globalization & Foreign Companies

Globalization & Foreign Companies


The purpose of this research paper is, firstly, to explain the concept of global expansion. Then the contrasting forces of integration and disintegration will be presented. Thirdly, it provides the transformation in which a diversified MNC becomes a fully integrated global enterprise. Lastly, the implications for international managers as restructuring redefine power and hierarch will be stated.

Once the companies are fulfilled with the saturation of the existing markets, they will expand the businesses abroad. Not only change the structure of the companies, but also the roles and responsibilities of people in the organizations. The form which the companies will be applied depends on many factors such as management, skills and expertise, and resources. The companies might focus on integration, disintegration, or merging both of them; however, they must face many challenges to optimize their objectives.

The transformation in which a diversified MNC becomes a fully integrated global enterprise

From the findings of global expansion, it can be seen that the global convergence and national responsiveness influence the companies to transform to transnational or virtual corporation. In order to become fully integrated global enterprises, the company have to seek efficiency as a means to achieve global competitiveness. It does not only recognize the importance of local responsiveness, but also acknowledge as a tool for achieving flexibility in international operations.

The ultimate goal of transformation is to help the companies escape from traditional ways of work and move forward to be flexible, empowering, and communicative. Both global and multinational companies are partially true. Instead of centralizing or decentralizing, the transnational companies should select to centralize some resources and capabilities within home country operation in order to realize economies of scales and protect their core competencies, as well as decentralize other resources on a local basis to create flexibility and avoid the dependence on a single facility.

The challenge of responsiveness is vital for transnational companies because of the unpredictable and frequent changes in economic, technological, political, and social environments. The transnational companies can develop responsiveness by building multinational flexibility. The companies should design the production facilities and automation flexibly to respond to variable in demand and supply. Furthermore, the role of the national operations is different in all markets. Some national subsidiaries may adopt standard global products while the others are encouraged to differentiate. Nevertheless, the most important element is the roles and responsibilities in each department should be managed independently.

However, there are three main features that describe the enterprise integration. The first feature is cooperation and communication between internal departments. People from various departments share the common goals and act simultaneously as well as exchange the information flow both horizontally, between departments, and vertically, between managers and staffs. The next feature as coordination of knowledge across functional boundaries. Knowledge may come from various levels, such as individuals, group, functions, and organization. Furthermore, this knowledge is coordinated by asking people to share their point of view that they have created and spread it to everyone in the ...
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