Transnational Strategies

Topics: Globalization, Strategic planning, Management Pages: 7 (1445 words) Published: September 26, 2014
Art Gonzalez

Weekly Assignment 4: Developing Transnational Strategies

1

Compare and contrast international, multinational, global and transnational strategies which are used by today's MNEs.
In dealing with the environmental forces, global efficiency, flexibility and learning, to achieve success, worldwide operational managerial methods led to four management strategies known as international, multinational, global, and transnational (Bartlett & Beamish, 2014, p. 215). The following discussion compares and contrast how each strategy handles these forces.

International Strategy
An international strategy initially focuses on exporting products to foreign overseas markets with the product’s life-cycle as the time-based driving force and is very innovation driven (Bartlett & Beamish, 2014, p. 113). It is less efficient like a multinational but unlike a global strategy which has very well developed scale operations (Bartlett & Beamish, 2014, p. 216). Furthermore, because it’s not flexible to forces, it leaves the strategic responses to its local units; on the contrary, the multinational relies on its worldwide enterprise to respond to competition by responding in other areas while a global strategy uses an all-is-one approach by using all of its resources when responding to competition (Twarowska & Kąko, 2013, p. 1005). Finally, its learning is very challenging because flows from headquarters to subunits like globals but unlike multinational subunits which have localized learning with resource support from headquarters.

Multinational Strategy
This strategy builds up local units and very resource rich national subsidiaries that can respond to local market needs or opportunities with localized products and strategies (Bartlett & Beamish, 2014, p. 113). For this reason, it is not very efficient like internationals and very far behind the curve when compared to global strategy. In addition, its inflexibility like an international to

Art Gonzalez

Weekly Assignment 4: Developing Transnational Strategies

2

change forces it to counter by strengthening areas of least resistance which differs from the flexibility in globals. This strategy has subunit-based learning which has difficulty producing good managers like internationals which contrasts from the global headquarter-to-subunits flow.

Global Strategy
This strategy relies heavily on scope economies to place its products in the least cost and high value position (Bartlett & Beamish, 2014, p. 216). Unfortunately, it sacrifices flexibility like the latest developments in other countries and usually centralizing learning is sensitive to macroeconomic forces. However, studies show that they attempt to be flexible in responding to economic forces by deploying assets to other subunits and by creating allied networks to share knowledge from unit to unit (Johnson, Arya, & Mirchandani, 2013, p. 50).

Transnational Strategy
The aforementioned strategies attempt to be competitive worldwide; however, they are incomplete and each have weaknesses that handicap their ultimate goal of gaining the ultimate advantage globally. That is why the transnational strategy strives to achieve efficiency, flexibility, and learning by responding to national differences, building up scale economies and achieving scope economies simultaneously which is a very ambitious endeavor (Bartlett & Beamish, 2014, p. 216).

Conclusion
The international company focuses on innovation while the multinational strives for differentiation and the global seeks to find the best-cost position. When seen from a transnational point of view, these are not whole or complete approaches. Unfortunately, a transnationals goal of applying all the strategies simultaneously presents another level of uncertainty that is not easy or straightforward to obtain (Bartlett & Beamish, 2014, p. 222).

Art Gonzalez

Weekly Assignment 4: Developing Transnational Strategies

3

References

Bartlett, C. A.,...


References: Bartlett, C. A., & Beamish, P. W. (2014). Developing Transnational Strategies: Building Layers
of Competitive Advantage. In Transnational Management Texas, Cases, and Readings in CrossBorder Management (7th ed., pp. 208-222). New York, NY: McGraw-Hill.
Bartlett, C. A., & Beamish, P. W. (2014). Managing Differences: The Central Challenge of
Global Strategy. In Transnational Management Texas, Cases, and Readings in Cross-Border
Management (7th ed., pp. 267-278). New York, NY: McGraw-Hill.
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