Global business generally refers to international trade. A company which is doing business all over the world, that business are called global enterprises. Earlier also there was the exchange of goods over great distances. Such trade, of course, was not by definition global but had the same characteristics.
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Global Enterprises
Global enterprises are the companies that operate around the world. There are categories based on their huge size, a large number of products, advance in technology, marketing, strategy and network of operations all over the world.
Through a network of their branches in several countries, global enterprises extend their industrial and marketing operations. Their vision to work across many global frontiers to earn in international currencies of many countries. These organizations have books of accounts of various countries, which at the end of financial year of respective countries being consolidated together, according to its usage.
Browse more Topics under Private Public And Global Enterprises
- Types of Companies and Forms of Organising Public Sector
- Departmental Undertakings
- Statutory Corporations
- Government Company
- Changing Role of Public Sector
- Joint Ventures
Global Business Services
Instead of operating numerous shared service centres and managing outsourcing vendors independently, they are:
- implementing global business services,
- providing integration of governance, locations and business practices to all shared services and,
- outsourcing activities across the enterprises.
A global enterprise is one which owns and manages the functions in two or more countries. for example- Unilever Ltd, Coca-Cola, Samsung etc.
Features of Global Enterprise
Huge Capital Resources
These enterprises have huge financial resources. They have the ability to raise funds from different sources. Funds are raised by the issue of issuing equity shares, debentures, etc to the public. The investors of the host countries are always willing to invest in them because of their high credibility in the market.
Foreign Collaborations
With companies of the host countries, these enterprises enter into agreements. These agreements are made in respect of the sale of technology, production of goods, patents, resources, etc.
Advanced Technologies
These enterprises use advanced technology for production, hence goods/services provided by the MNCs conform the international standard and quality specifications.
Product Innovations
These enterprises have efficient teams doing research and development at their own R &D centres. The main task is to develop new products and design existing products into new shapes in such a manner as to make them looks and new and attractive and also creates satisfies the demands of the customers.
Expansion of Market Territory
They expand their market territory when the network of operations of these enterprises extends beyond their existing physical boundaries. They occupy dominant positions in various markets by operating through their branches, subsidiaries in host countries.
Centralized Control
Despite the fact the branches of these branches of these enterprises are spread over in many countries, they are managed and controlled by their Head Office (HO) in their home country only. All these branches have to work within the broad policy framework of their parent company.
Solved Questions for You
Q. Explain the term “Multinationals”?
Ans- The term is used in a neutral sense simply to indicate the very large size and participation in global markets. A more negative connotation of the term is that:
- such corporations are effectively beyond the full reach of national laws.
- They have a presence in many locations and,
- Can move money and resources around at will, which can sometimes escape taxation and thus represent a power beyond public control.
Q3. What motivates a company to go global?
Ans- The desire to expand its business motivates a company to go global. If a company wants to enjoy the fruits of large-scale production, it needs a bigger market spread over too many countries.
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