What is a global company

- Ask 10 different executives what is a global company and chances are that you'll get 10 different answers. Some might say that a global company is one that pursues customers in all major economies, in particular, the Americas, Europe, and Asia. Others might say that you are not really global unless you produce locally what you sell locally. Yet others might suggest that real globalization is when your corporate headquarters is globally disperse and your top team consists of different nationalities. There are two problems with these perspectives regarding the nature of a global company. First, each overlooks the fact that globalization is a multidimensional concept that can never be understood fully from just one perspective. Second, that globalization can range from low to high and is not a binary variable with only two values, global or nonglobal. I would argue that globalization should be viewed as a four-dimensional concept. That is, a company can be more or less global along each of four dimensions. The first dimension, Globalization of Market Presence, refers to the extent to which a company is targeting customers in all major markets throughout the world. Even within the same industry, Globalization of Market Presence can range from relatively low to very high. For example, Walmart generates about a third of its revenues from outside the US. In contrast, Target generates 100% of their revenues from within the US and none whatsoever from foreign markets. The second dimension, Globalization of Supply Chain, refers to the extent to which the company is using optimal locations for the performance of various activities in its supply chain. A company can have a fairly local or regional market presence and yet have a highly globalized supply chain or vice versa. For example, Target has retail stores only in the United States. However, its supply chain is extremely global. The third dimension, Globalization of Capital Base, refers to the extent to which the company is tapping into optimal sources of capital on a worldwide basis. Baidu, China's leading internet search company, illustrates that a company can be quite local in terms of market presence and supply chain and yet have a highly globalized capital base. Baidu's market base and operations are centered primarily in China. Yet the company is listed on the US-based NASDAQ. Last but not least, Globalization of Corporate Mindset, refers to the extent to which the corporation, as a collective, reflects an understanding of diversity across cultures and markets, coupled with an ability to integrate across this diversity. A company's corporate mindset depends on the mindsets of the individuals who lead the enterprise, as well as the organization that determines how these people interact and make decisions. To sum up, the next time you think about what is a global company, or how global your own company is, remember that this question needs to be answered in terms of four dimensions. Number one, Globalization of Market Presence, two, Globalization of the Supply Chain, three, Globalization of the Capital Base, and four, Globalization of the Corporate Mindset.