Managing the global enterprise in today's multipolar world

Though most companies with international aspirations have invested significant time and resources in devising their global expansion strategies, they have not devoted commensurate attention to developing an internal management model that would enable them to thrive as  a global enterprise in what is now a multipolar environment. The spectacular rise of emerging markets has transformed the nature and pace of globalization across industries over the last decade. Growth  and competition have shifted from the developed economies of the  U.S. and Europe to the emerging economies of the rest of the world, creating a far more complex playing field. In this new context, most companies with global ambitions — regardless of what stage they are  at in realizing them — have put in place plans to either strengthen or establish their positions in burgeoning markets.

Meanwhile, high-performing companies in these emerging markets are themselves stepping out onto the global stage, expanding beyond their local and regional roots to stake aggressive positions in the developed world. The modern multinational operating in this new age of globalization — whether a developed economy veteran or an emerging market champion — has to contend with the vastly different competitive dynamics of an increasingly large number of markets around the world. The key challenge many confront is how to manage this new global enterprise effectively. How much freedom should local entities have to manage themselves, given their different dynamics? How does one balance this local autonomy with the need to achieve global scale and standardization, so that the company is more than the sum of its individual parts? How much central coordination is optimal? Does it even make sense to have a headquarters operation anymore? And where should the management talent that runs the company come from?

In our view, global success in this multipolar world hinges on three management enablers: a rebalanced organizational structure and footprint; dispersed decision rights and tighter controls; and a fresh approach to leadership and talent management.