Transnational Organizations

The Transnational Challenge

 Instead of demanding efficiency, responsiveness, or learning as the key
capability for success, worldwide businesses now require particiapting
firms to achieve the three capabilities simultaneously to remain
competitive

The Characteristics of Transnational Organization

 Builds and legitimizes multiple diverse international perspectives able to
sense the complex environmental demands and opportunities
 Its physical assets and management capabilities are distributed
internationally but are interdependent
 It develops a robust and flexible internal integrative process

Fostering Multidimensional Perspectives

 International Companies: Dominated by functional management groups
 Multinational Companies: Dominated by area/country management
groups
 Global Companies: Dominated by product management groups
 Transnational Cos.:Biases in decision- making process reduced by
building dispersed capability/credibility/influence

Building Distributed and Interdependent Capabilities

 Viable national units achieve gloabl scale by becoming company’s world
source for a given product or expertise
 Company taps into important technological advances and market
developments wherever they occur with empowerment
 Secure the cooperation and involvement of the relevant national units in
technology up- gradation, new product development & marketing
strategy development

Building Distributed & Inter- Dependent Capabilities (cont.)

 Development of an Integrated Network Model of organization
 Management considers each of the worldwide units as a source of ideas,
skills, capabilities and knowledge for the company
 Efficient local plants become international production centers; innovative
national labs become “centers of excellence”, creative subsidiary
marketing groups become worldwide marketing strategy leaders

Anatomy, Physiology & Psychology of the Transnational

 Tools and Processes used to build and manage the transnational include:
o Structuring the organizational anatomy - focus on microstructural tools
(e.g. task forces, committees) in addition to macrostructural tools (e.g.
line management structure)
o Building the organizational physiology - volume, content and direction
of information flows to be channeled through formal and informal
systems thru mgt. trips, meetings, etc.
 Developing the organizational psychology - the set of explicit or implicit
corporate values and shared beliefs) through three tools:
o Clear, shared understanding of the company’s mission and objectives
o Visible behavior and public actions of senior management
o Company’s personnel policies, practices and systems