Multinational companies have investment in other countries, but do not have

coordinated product offerings in each country. More focused on adapting their products
and service to each individual local market.
Global companies have invested and are present in many countries. They market their
products through the use of the same coordinated image/brand in all markets. Generally
one corporate office that is responsible for global strategy. Emphasis on volume, cost
management and efficiency.

The terms "global company" and "multinational company" may seem like the same
thing, but they have very different features. However, people use global company and
multinational company interchangeably so much that people often assume these terms
are synonymous. To further add to the confusion, academics sometimes disagree on
the exact definitions of global and multinational company.

History
In informal circles, a global company and multinational company both refer to a
company that operates in more than one country. Before the 20th century, a global
enterprise was one that operated in one country and traded in the far reaches of the
world. For instance, the East India Company was one of the largest companies in the
world and operated out of Britain from the 1500s to the 1700s. However, the East India
Company primarily traded with Asian countries, such as China and India.

Practical Use
Political scientists and economists do not have a standard definition for a multinational
company or global company, according to Iowa State University. For instance, one
theory suggests that a company only becomes a multinational company when it has
owners from two or more countries. Another test requires company executives to come
from a mix of nationalities. In practical terms, people tend to call any company that sells
products or services on the global market or has operations in several countries a
multinational or global company.

Related Reading: What Are Two Strategies Commonly Used by Multinational

Companies?

Academic Differences
Guilherme Azevedo, political scientist at Pontifcia Universidade Catlica do Rio de
Janeiro, identifies a multinational company as a transitional state toward becoming a
truly global company. A multinational company has decentralized operations with little
communication amongst divisions. In addition, the local community affects the
multinational business's marketing strategy. For instance, McDonald's has
establishments in dozens of countries but its menus vary depending on the culture. In
Israel, McDonald's serves a kebab on flatbread rather than the hamburgers seen in the
United States. A company becomes a global enterprise when it integrates all of its units
and focuses its marketing strategy on worldwide scale. For instance, a global software
company would sell the same operating system in all countries, but make a few
changes to the program to account for foreign language speakers. Homogenizing a
product line as much as possible allows the company to keep costs low by selling a
larger volume of a certain good.

Considerations
A business trying to transition into the global economy should employ people that
understand the culture into which the company plans to expand. Global companies
often offer the same product in different countries, but translate or modify a product's
logo and packaging to meet local tastes. A company trying to globalize should also
reorganize its management structure and supply chain. An export management
company can handle restructuring in the supply chain and compliance with laws of
foreign countries.

Globalization is one of the defining issues of our time. The terms global and
multinational are used interchangeably in business so much that its not surprising that
people assume the terms are synonymous. Scholars will tell you they are not the same,
even if they cant quite agree on exact definitions. So what are the differences and do
they matter?

Once upon a time, a global enterprise was one that operated in one country and traded
in the far reaches of the world, the East India Company, for example. Today, in informal
circles, a global company and multinational company both refer to an organization that
operates in more than one country. Michael Porter, a highly acclaimed Harvard
Business School professor, was one of the first scholars to parse out the distinctions: a
multinational firm owns separate businesses located in different countries, but a global
firm pursues a unified strategy coordinated across multiple national operations.

A multinational organization uses a decentralized approach to its subsidiaries or

businesses around the world in terms of operations, resources, and, often, marketing
decisions as well. A global company, on the other hand, while it also has locations in
multiple countries, has created a single company culture with shared resources,
processes, and marketing strategies.

It can be argued that very few companies operate strictly globally. The best will actively
think about which pieces need to be global and which local. For example, technologybased companies such as our Syngenta client, leverage technologies globally, because
the crops to which those technologies are applied do not care about country borders.
However, regulations and commercial markets are very local, so the go-to-market
strategy must be adapted to each country or region. You might have a global active
ingredient for a pesticide or genetic structure for a seed, but national or local brands,
government approvals and permits or labels, and commercial strategies.

Above all else, global vs. multinational is a mindset. A global view is not US-centric, UKcentric, Brazil-centric, etc., but rather looks simultaneously at the world in total and
individual countries. Kincannon & Reed embraces the global model; we operate as a
single office from more than 30 cities around the world. And, although we view the world
as one big global talent pool in which to fish, candidates must be evaluated against the
requirements of a national or local marketplace and business opportunity.

The benefits we see in this model include:

A team that we can easily assemble across time zones and continents so a search can
literally progress around the clock while still able to serve clients in very specific
operating environments.
The ability for principals and researchers to freely exchange ideas and contacts
relevant to a search regardless of where they are located.
In cases where communication and coordination are required between a client
organizations headquarters and a far-flung division, Kincannon & Reed principals can
coordinate from each end for a smoother process.

Although not every client organization or search engagement requires global capability,
a firm that practices global collaboration still offers benefits to you. If global capability is
important to you in a professional services firmespecially when dealing with your
precious human capitalmake sure that the firms definition of global means the same
things as yours.

MNC vs Global Company

When man created a way of communication to deal with each other during the early
times, trade was also developed. It started with the barter of goods and services;
exchanging what they have in excess for those things that they need but dont have.
When the population grew, and with mans invention of the things necessary for his
existence, money was invented which made trading more efficient. With this came the
expansion of trade from being between people in the same place to trading with people
from other places as well.

Today, the world is one global market where companies from certain countries have
offices and production plants in other countries. These companies are referred to as
multinational corporations and as global companies.
A multinational corporation or company (MNC) is an enterprise or corporation which is
involved in the manufacture of goods and services in two or more countries. It is also
known as an international corporation or company. Its headquarters is located in a
certain country which is called its home country, and it has offices in several other
countries called the host countries where it also operates. It must adhere to the policies
of the host countries and adapt its products to cater to the needs of the host countries.

MNCs play very significant roles in international relations, trade, and in globalization.
They are usually companies that have already made a name in the market for their
particular product and are equipped with a huge financial capability to expand to other
countries. An example of an MNC is Adidas.

Countries which are open to globalization welcome MNCs with open arms, offering
them with tax breaks and other incentives in return for the revenues that they can inject
into the host countrys economy as well as the employment prospects of its people.

A global company or corporation, on the other hand, is an enterprise or company which

is also involved in trade relations with other countries. Unlike MNCs, global companies
do not have official headquarters, and they are composed of autonomous units which
are parts of one parent or global company. Each unit in a certain area or country
handles their individual concerns, and the parent company handles concerns which
involve the overall global company. Like MNCs, they hire the local workforce, but they
usually pay local workers a higher salary.

Global companies sell the same products or services in every market using the same
image and maintaining the characteristics that their companys products are popular of.
An example of a global company is McDonalds which has stores in most parts of the
world.

Summary:

1.A multinational corporation, or MNC, is a company which produces goods and

services and has offices in several other countries while a global corporation or
company is a company which also has trade relations with several other countries.
2.MNCs usually pay local workers a lower salary rate than global companies.
3.MNCs have official headquarters while global companies do not.
4.Global companies sell the same product with their characteristic image while MNCs
adapt their products to the needs of the host countries.