Which company is transnational ?

2. Questions to be Answered
 Which Company is Transnational?
 What are the Attributes of a Transnational Company?
 What is the difference between a domestic, international,
multinational, global and transnational company?

3. Global
Views the world as a single
market. Tightly controls the
operations from
headquarters to preserve
focus on standardization.
Transnational
Prefers a flexible value
chain to facilitate local
responsiveness. Adopts
coordination mechanism to
global integration.
International
Uses existing core
competencies to exploit
opportunities in foreign
markets.
Multinational
Relies on foreign subsidiaries
operating as autonomous
units to customize products
and processes for local
markets.
Integration – Responsiveness Grid for Strategies
peculiar to Various types of Company
High
High
Low
Low
Pressure for National Responsiveness
PressureforGlobalIntegration

4. Attributes of Various Kind of Companies
Organizational
Characteristics
Multinational
Company
Global
Company
International
Company
Transnational
Company
Configuration of
Assets & Capabilities
Decentralized &
Nationally Self-
Sufficient
Centralized & globally
scaled
Sources of core
competencies
centralized, other
decentralized
Dispersed,
interdependent &
centralized
Roles of Overseas
Operations
Sensing and
exploiting local
opportunities
Implementing parent
company strategies
Adapting and
leveraging parent
company
competencies
Differentiated
contributions by
national units to
integrated worldwide
operations
Development and
Diffusion of
Knowledge
Knowledge developed
and retained within
each unit
Knowledge developed
& retained at the
centre
Knowledge developed
at the centre &
transferred to
overseas unit
Knowledge developed
jointly & shared
worldwide

5. WHICH COMPANY IS TRANSNATIONAL?
Attributes COMPANY A COMPANY B COMPANY C COMPANY D
Configuration of
Assets &
Capabilities
Selling in over 80
countries and
manufacture in 14
countries.
World regions report
to world trade
organisation.
Key executives in
subsidiaries from
host country but CEO
and COO from home.
Presence on three
continents in
magazines,
newspapers and
television. Started as
Australian, shifted to
UK and today in US.
All manufacturing in
home country. All
engineering and
manufacturing in one
location.
European CEO always
but manufacture in 28
countries and market
in 92 countries.
Roles of Overseas
Operations
Overseas companies
are responsible for
adapting to the
unique market
preferences
Know how to acquire
and integrate
properties.
Rising value of home
currency forcing to
invest in overseas
manufacturing.
Leadership in North
America and Japan,
found extremely
difficult to increase
sales and earnings in
Third World.
Development and
Diffusion of
Knowledge
Subsidiaries have
complete
responsibility for their
operations including
strategy formulation
Stick to English and
don’t believe in
success in foreign
print or broadcast.
Senior Managers at
home and most of
foreign markets are
home country
nationals
Europeans serve all
over the world but
executives from US
and Japan serve only
in their home
countries.

6. THANK YOU