Word Count: 1613 words
Table of Content
4Definition of Global Integration Ã¯Â¿Â½
4Definition of Local responsiveness Ã¯Â¿Â½
5Definition of Transnational strategy and world-wide learning Ã¯Â¿Â½
6Problem analysis of conflicting demands Ã¯Â¿Â½
6Hypothesis and synthesis for realizing a Transnational Strategy Ã¯Â¿Â½
7Example of company using Transnational Strategy Ã¯Â¿Â½
8Evaluation and Conclusion Ã¯Â¿Â½
In the present day, most Multinationals Corporations (MNCs) conduct their business through one of the two classic processes which are Global Integration and Local responsiveness. MNCs are required to build layer of competitive advantage, compromises of ability to capture Global Integration, Local Responsiveness, and World-Wide Learning (Peng, 2006).
However, there are few problems of conflicting demands between Global Integration and Local Responsiveness. MNCs have to find some technique to balance these two factors which lead to capability to link and leverage their resources to take advantage through World-wide Learning.
Appendix 1 presents Global Integration and Local Responsiveness framework.
Definition of Global Integration
Global integration is a process of MNCs that use global strategy to distribute and coordinate various activities across several countries. Three principal economic forces that drive this process are economies of scale (the average cost of production will decrease while the output units will increase), economies of scope (using the same machinery to produce difference products), and national differences in the availability and cost of productive resources (Bartlett, Ghoshal & Birkinshaw, 2004).
In order to conduct business through the global integration process, company must be centralized structure (most major operation are from headquarter and provide standardized product and services worldwide) in order to reach maximum profit from low-cost advantage (Peng, 2006).
However, global strategy has some limitation such as too much centralized control which leads to lack of local responsiveness. Also, there is a huge cost to link...