Multinational Enterprises in the New Europe: Are They Really Global?

Alan Rugman and Simon Collinson
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Simon Collinson: Warwick Business School, University of Warwick

No 2005-12, Working Papers from Indiana University, Kelley School of Business, Department of Business Economics and Public Policy

Abstract: Despite a pervasive belief that the world’s largest firms compete globally, the vast majority have most of their sales in their home region. Of the top 500 firms for which regional sales data are available, 118 are from Europe, and they compete predominantly within the European region. On average, 62.8% of their sales are in their home region; only three are global, 8 are host-region oriented and 16 are bi-regional, while 86 are home-region based. To illustrate the four categories, we present case studies of 9 European multinationals — Carrefour, TotalFinaElf, Deutsche Bank, Nokia, Philips, GlaxoSmithKline, L’Oréal Paris, Diageo,and AstraZeneca. We analyze the geographical distribution of their operations and their current structure. We also show that management research is strongly focusedon the special cases of global and bi-regional firms, rather than on the large majority of home-region firms. This implies that managing in the new Europe needs tobe regional, not global.

Date: 2005
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Published in Organizational Dynamics, 2005

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