Multinational / International /
Global /Transnational Companies
Consumer Electronics Business :
How could Matsushita( Panasonic) evolve in
just two decades and become the undisputed leader in
the consumer electronics industry ?
Of the companies it overtook, why has Philips found
it so difficult to adjust to the industry changes ? Yet it
has survived .
While General Electric was eventually forced to
sell off its consumer electronics business ?
Branded packaged products
In branded packaged products like soaps and detergents
defended its dominant world
position for more than half a century ?
able to mount
thrust into international markets in the postwar era ?
Why was the internationalization thrust of
dominant Japanese competitor in this industry, been
stalled in various markets, despite Kao’s formidable
technological capabilities, its highly efficient plants, and
its demonstrated marketing muscle ?
Telecommunications / Switching
How has Sweden’s Ericsson enhanced its position
as a leader in the dynamic telecommunications
switching business ?
What is behind
gains in this highly
competitive global industry ?
, the most international of all the
telecommunication companies,forced to abandon its
planned entry into the US switching market , and then
to sell its formidable European telecommunication
The disappointments and failures of some
of those companies were not due to
inappropriate strategic analysis, but to
The challenge was how to develop the
organizational capability to do it.
The Nine Companies
Key strategic Capabilities:
Building strong local
company knowledge and
worldwide diffusion and
Multinational Mentality : Management
regards overseas operations as a portfolio of
Decentralized Federation : Many key assets,
responsibilities and decisions decentralized
Personal Control : Informal HQ-subsidiary
relationships overlaid with simple financial controls
International Mentality: Management
regards overseas operations as extension to a
central domestic corporation
Coordinated Federation : Many assets,
resources, responsibilities and decisions still
decentralized, but controlled from
Administrative Control : Formal
management planning and control systems
allow tighter HQ- subsidiary linkage
Global Organizational Model
Global Mentality: Management treats
overseas operations as delivery pipelines
to a unified global market
Centralized Hub : Most strategic assets,
resources, responsibilities and decisions
Operational Control : Tight central control
of decisions, resources and information
Each of these nine companies had become a
large worldwide corporation by exploiting its
particular strategic capability.
However environmental forces had dramatically
changed the nature of the strategic demands in a
wide range of businesses and the traditional
approaches of the multinational, global and
international companies could no longer yield an
The challenges required a new solution
Understanding of the problemsIn the past GE, Kao and ITT was characterized by a single dominant
strategic demand. As a result , a company could compete effectively as
long as its capability fit the strategic demand of the business.
To compete effectively , a company had to develop
global competitiveness, multinational flexibility and
worldwide learning capability simultaneously.
This is where P& G , Unilever , NEC had responded effectively as they
broke away from their traditional models very early.
This break away to a new organizational model is termed as
A transnational organization is
perhaps the necessary response
to the changes in the international
operating environment as it links
environmental complexity ,
strategic demands and
e.g.- Unilever as a Transnational Company
Multinational strategy- acquiring identity of its own
through sensitivity and responsiveness in the countries in
which it operates.
Global Strategy –Taking advantages of global economies
of scale in exporting from low- cost countries.
International Strategy : Developing and transferring
parent company knowledge through diffusion to its
subsidiaries across the world.
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