DISCUSSION RESPONSE - Author Nora Carrol Posted date...

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Author: Nora Carrol Posted date: Wednesday, November 10, 2010 11:42:18 AM EST Last modified date: Wednesday, November 10, 2010 11:42:18 AM EST Total views: 11 Your views: 2 ‹ Previous Post Hide Parent Post Author: Tony Burris Date: Monday, November 8, 2010 10:37:20 PM EST Subject: Mod 6/Tony Burris Jr. What do you see as the main organizational problems that are likely to be associated with implementation of a transnational strategy? Transnational strategy is a strategy that firms pursue to try to achieve low costs through location economics, economies of scale, and learning effects; differentiate their product offering across geographic markets to account for local differences; and foster a multidirectional flow of skills between different subsidiaries in the firm’s global network of operations. This strategy is difficult to achieve because it places conflicting demands on the company. It’s difficult to implement with simultaneous requirements for strong central control and coordination to achieve efficiency and local flexibility and decentralization to achieve local market responsiveness. The strategy implementation problems of creating a viable organizational structure and control systems to manage this strategy are immense. Also, Implementation difficulties include communication issues, trust issues, multiple roles, flexibility and cultural issues, among many others. The main organizational problems that are likely to be associated with the implementation of transnational strategy are cultural differences, language barriers, handling the functions of virtual teams, technical challenges, and sound knowledge of local market. Differentiating the product to respond to local demands in different geographic markets would be difficult due to cultural differences and language barriers. If different members of a virtual team are located at different geographies, then they will be difficult handling the functions of virtual teams. They would be technical challenges because systems would need to be up to date and functioning smoothly at all times. Lastly, if there is not a clear understanding of the consumer’s preferences, then the sound knowledge of local market wouldn’t be understood. However, this strategy does confront significant pressures for cost reductions and for local responsiveness. The book provides example of how Caterpillar redesigned its products, invested in large-scale component manufacturing facilities, and augments the centralized manufacturing with assembly plants in each of its major global markets to reduce its overall cost structure and double output per employee. So, this strategy does work but it's difficult and complex to making it work (Hill 439-440). Hill, C. W. (2009). International Business - Competing in the Global Marketplace. In C. W. Hill,
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DISCUSSION RESPONSE - Author Nora Carrol Posted date...

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