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