"Why Some Companies Excel at Conducting Business Globally"
Journal of Organizational Excellence
Autumn 2006, pp. 3-10
The Hay Group surveyed 74 companies (from the list of the "2006 Most Admired Companies rankings) in order to better understand why some companies are the best performers in conducting business globally. The results indicate that the Global Leaders set themselves apart through their capabilities in:
- Balancing demands for worldwide integration with local responsiveness to achieve competitive differentiation—In differentiating themselves from competitors, global companies tend to take three different approaches: worldwide integration, strong local presence, or diffusing and adapting unique knowledge and capabilities. Global companies tend to be better at each of these approaches.
- Managing market entry decisions—The Global Leaders don't look for short-term windfalls. Instead, they stick with their plans in the face of initial challenges in new markets.
- Coordinating operations across a dispersed organization—In addition to using procedural systems, Global Leaders also make use of "normative control" and consensus.
- Managing performance to ensure execution—The Global Leaders do better than their peers at having a clearly defined global approach to performance management, having a clearly defined global compensation system, and having greater success in communicating compensation strategies to line managers throughout the organization.
- Developing and leveraging talent globally—Global Leaders are more likely to make use of planned career assignments to develop global experience, have executive teams that include members who have held positions outside of their home countries, and have boards of directors that are diverse in terms of members' nationalities.
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