Barlett and Goshal's Framework
Barlett and Goshal’s framework.
Barlett and Goshal identified four distinct types of multinational corporations. These four types illustrate which strategy outlook MNCs have towars managing their subsidiaries and how they balance the potential needs of global integration and global differentiation.
Choice of a strategy model should be made after an evaluation of which forces pushes the MNC towards a global integration and global differentiation. This strategic choice should fit pressures of the environment where the MNC tries to build the strategic capabilities wanted by consumers. The frame work of Barlett and Goshal explains the Drivers of strategy. The model categorizes the four types of MNCs according to degree of local responsiveness and the degree of Global integration.
Multi domestic (Low pressure for integration-high pressure for local responsiveness)- It is based on response to local market demands. The innovation and knowledge developed at national companies will remain there and ther will most likely not be dispersed to other companies within the MNCs
International (Low pressure for integration-Low pressure Local responsiveness- Based on home country expertise. Control of technologies used for production will be structured and developed at home. Development of knowledge will move from home to subsidiaries.
Global (High pressure of global integration- Low pressure of local responsiveness)- )- It is based on economies of scale. Subsidiaries of MNCs are rather weak and tightly coupled to home organization.
Transnational(High pressures of global responsiveness- High pressures of local responsiveness)- Strategy maximize both responsiveness and integration where knowledge innovation is sought, developed and dispersed within entire network. MNC is regarded network an each subsidiary is given responsibility comared to its capabilities and strategic mission.
Each MNC should choose the strategic model that fits to the environmental pressures
Barlett and Goshal identified four distinct types of multinational corporations. These four types illustrate which strategy outlook MNCs have towars managing their subsidiaries and how they balance the potential needs of global integration and global differentiation.
Choice of a strategy model should be made after an evaluation of which forces pushes the MNC towards a global integration and global differentiation. This strategic choice should fit pressures of the environment where the MNC tries to build the strategic capabilities wanted by consumers. The frame work of Barlett and Goshal explains the Drivers of strategy. The model categorizes the four types of MNCs according to degree of local responsiveness and the degree of Global integration.
Multi domestic (Low pressure for integration-high pressure for local responsiveness)- It is based on response to local market demands. The innovation and knowledge developed at national companies will remain there and ther will most likely not be dispersed to other companies within the MNCs
International (Low pressure for integration-Low pressure Local responsiveness- Based on home country expertise. Control of technologies used for production will be structured and developed at home. Development of knowledge will move from home to subsidiaries.
Global (High pressure of global integration- Low pressure of local responsiveness)- )- It is based on economies of scale. Subsidiaries of MNCs are rather weak and tightly coupled to home organization.
Transnational(High pressures of global responsiveness- High pressures of local responsiveness)- Strategy maximize both responsiveness and integration where knowledge innovation is sought, developed and dispersed within entire network. MNC is regarded network an each subsidiary is given responsibility comared to its capabilities and strategic mission.
Each MNC should choose the strategic model that fits to the environmental pressures
References: URL: http://www.emirates.com. http://www.businessmate.org/Article.php?ArtikelId Donald A. Wendell H. Mc Culloch, Jr. International business- 3rd Ed. (Homewood, Illinois: Irwin, 1989) R.M. Czinkota, A.I. Ronkainen, Moffett, (2004) International Business, 7th Ed.