We tend to read the following terms and think they refer to any company doing business in another country.
Each term is distinct and has a specific meaning which define the scope and degree of interaction with their operations outside of their “home” country.
- International companies are importers and exporters, they have no investment outside of their home country.
- 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.
- Transnational companies are much more complex organizations. They have invested in foreign operations, have a central corporate facility but give decision-making, R&D and marketing powers to each individual foreign market.
Andrews’s advice is if in doubt about the right term to use, try the generic term “international business”.