Characteristics of Global Businesses

The Twenty First Century will see unprecedented expansion of business
opportunities across borders. While in the past, globalization was limited to the
largest companies, this is no longer true. Small and medium sized businesses
now tap global markets and receive supplies from all over the world. This
borderless and boundary-less growth has far-reaching implications for the
profession of human resources. This treatment of global business begins with
information about the global marketplace and reasons why companies want to
expand globally.


Global commerce and businesses have existed for centuries. Much of the early
cross-border activity was done for reasons of exploration, conquest, conversion
and colonization. Later in the industrial age, improvements in transportation
and technology such as railroads and the telegraph, and then later the
telephone, automobile and airplane did much to shrink borders and time
horizons. The result was increased traffic of people, resources and products
across borders and throughout the world.

This press for globalization accelerated and became a driving force for large
companies in the 1960s. These companies became the first modern multinational
corporations, and they had many reasons for expanding beyond their borders.
The reasons remain much the same today: to open new markets and sources of
customers, and to produce products more cost effectively.


In the late 1980s and 1990s, the geopolitical situation changed dramatically.
The Berlin wall came down and the Cold War ended. The information economy
started to predominate and technologies such as wireless communications and
the Internet further collapsed borders and time. Favorable international trade
agreements and the availability of global capital have strengthened the move to
free market economies around the world. Companies of all sizes now view
global business, not as a separate department or group of people, but as a key
source of competitive advantage for the entire enterprise. Globalization has
become a key tenet of the new economy and the way the world operates.