Transnational organizations Flashcards
Three challenges of global organizational design
greater complexity and differentiation, an increased need for integration, and more difficulty transferring knowledge and innovation.
Reasons to have multiple headquarters
o Organizations have to accept an extremely high level of environmental complexity in the international domain and address the many differences that occur among countries.
o organizations must find ways to effectively achieve coordination and collaboration among far-flung units and facilitate the development and transfer of organizational knowledge and innovation for global learning.
Transnational model
- highly differentiated to address the increased complexity of the global environment yet offers very high levels of coordination, learning, and transfer of organizational knowledge and innovations.
o represents the most advanced kind of international organization. It reflects the ultimate in both organizational complexity, with many diverse units, and organizational coordination, with mechanisms for integrating the varied parts. deal with multiple, interrelated, complex issues
Aspects of transnational organization
o Create an integrated network of individual operations
o Not an organizational chart; rather a managerial state of mind
o Assets and resources are dispersed worldwide
o Structures are flexible and ever-changing
o Subsidiary managers initiate strategy and innovations that become strategy for the whole organization
o Corporate culture, shared vision, and management style guide the organization
Advantages of two headquarters
o Adapt to local culture and understanding of local business and sales preferences
o International brand recognition
o Increased talent pool
o Efficiency in transfer of knowledge, time zone efficiencies
o Cost reduction
o Government incentives
Disadvantages of two headquarters
o Language barrier
o Deployment of goals and strategies that don’t align with company as a whole
o Diversion from overall corporate culture
