Transnational Model

2007/// Filed in: MNEs
The transnational form is used to characterize MNEs that attempt to achieve high global integration and high local responsiveness. As already pointed out, the limitations of the multidomestic and global structures led to the concept of transnational corporation (high localization/high global integration) proposed by Bartlett and Ghoshal, and widely accepted by the research community (Bartlett.00,Bartlett.92,Bartlett.88,Bartlett.87,Bartlett.87b, Harzing.00,Yip.94). This organizational structure follows the N-form (network) as opposed to the M-form (multi-divisional) since it focuses on integration, combination, multiplication of resources and capabilities, and managing assets and core competencies as a network of alliances, as opposed to functional or geographical division. The ultimate objective is to have access and make effective and efficient use of all the resources the company has at its disposal globally, including both globalized knowledge and tacit localized knowledge. A potential limitation of the transnational company is the fact that it requires management intensive processes (Ohmae.06a). In any case, the transnational model is still primarily considered a mindset, idea, or ideal rather than an organization structure found on may MNEs, specially in manufacturing (Segal-Horn.99).

- Matrix Position: high localization / high global integration.
- Stage: developed stage of internationalization.
- Subsidiary role: local responsiveness, country/region specific strategies.
- Center role: global integration, coordination, resource allocation, R\&D, knowledge transfer
- Management Decisions: bottom--down (differentiation) and top--down (integration), matrix structures, N-form.
- Technology \& Knowledge Transfer: knowledge transfer across borders.
- Percentage of Foreign Sales: high.
- Example: McKinsey, Cap Gemini Sogeti.

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