A global operating model is the vehicle through which a company executes its business model and international growth strategy.

A core requirement of a global operating model is that it enables multinational executives to coordinate operations between the corporate center and the geographic business units and to form an end-to-end strategic value chain. Four organizational elements underpin these capabilities. One element (leadership and people) is more intangible—or “soft.” The other three elements (organizational structure, processes and technologies) are more formal—or “hard.” Performance measures tie all aspects of the operating model together (see chart).


Leadership and people. Leadership consists of the senior team that substantially influences the organization and serves as an example for how it should operate. Of particular importance to an operating model are an organization’s leadership style, its degree of diversity and the way its leaders make decisions. As for people, the key aspects are the company’s approach to talent management, its emphasis on employee engagement and the way it fosters networking. Also included is the organization’s cultural dimension—the beliefs and shared values that bind its members together.

Processes. This element consists of the clusters of activities that produce measurable outputs. It includes all the management processes that help coordinate input-output activities in the value chain across geographic units. Some examples of processes are strategic planning, resource allocation, knowledge management, innovation management, customer relationship management and supply chain management.

Technologies. This includes the physical equipment, software and tools that underpin the processes. For example, enterprise-resource-planning software and intranet portals can help effect financial control, knowledge management and innovation processes.