Introduction
The change taking place in the world in terms of business processes makes firms transform towards universal mindset. This is because of the increase in the need for worldwide business. The demands caused by global operations, global customers, global resources, global products, and global cooperation.
Transnational strategy demands for the reliance of contemporary technologies so as to make a firm integrate their international commerce activities hence, the strategy focuses on standalone and decentralisation systems (Gorindarajan & Gupta 2003, p. 123). Thus, a firm changing their strategy from a global to a transitional strategy confronted with some significant challenges.
The paper identifies and explains some of the important challenges that a firm may confront when implanting the change from global to transnational strategy. In addition, the essay discusses ways in which the firm may overcome the challenges that arise during the change.
Change from global to a transnational strategy
Global strategy is regionally decentralised as the strategy geared towards an assortment of transnational and international strategy. The strategy incorporates the use of worldwide standards and common systems. Therefore, change to transnational strategy from global strategy confronted with challenges.
Transnational strategy offers enterprises with a chance to connected through Internet and allocate the business systems and worldwide date to be common and integrated. The strategy adopts centralisation and decentralisation systems in promoting specialisation and interdependence of units. Transnational strategy standards and policies are similar in most nations (Marulanda 2010).
The advantage of transnational strategy is that it empowers an overseas enterprise unit to transform to a powerhouse of an expert modernisation. Additionally, strong points of international and multi-domestic approaches are pooled and shortcomings are reduced in international approaches.
Challenges in implementing the change
Achieving international approach is difficult as the approach puts contradictory obligations on companies to amalgamate actions in all their divisions as the company tries to meet local market obligations. Doing away with the challenges enhances worldwide operations.
Challenges comprise of information of institutional and administration structures and transforming business systems which can lead to institutional pressure (Marakas & O’Brien 2011, p. 28). Additionally, a firm faces a challenge of decision making as responsibility of decision, making delegated to partner entities and overseas units, while others are retained at headquarters.
Besides, a firm changing strategy from a global to a transnational strategy can face infrastructure, economic, political, and cultural challenges. Firms can experience infrastructure challenges in implementing transnational strategies as some developing countries might not have fibre-optic network or data capabilities as superpower nations.
Moreover, other infrastructures difficulties such as transportation can hinder the evolution of transnational strategy (Gorindarajan & Gupta 2003, p. 169). In addition, economic and political challenges that result from monetary policy, regulation practices, censorship laws, and government involvement can impede the change of strategy (Gelsomino 2011).
For example, Google, which is a multinational organisation, withdrew from the Chinese market owing to the Chinese official’s censorship of the Internet in the nation. Cultural challenges such as differences on values, preferences, beliefs, tastes, and opinions of persons of varied subsections or nations of the world can pose a challenge to transnational strategy.
The strategy geared towards uniformity; therefore, the differences present a challenge in implementation (Marakas & O’Brien 2011, p. 57). For example, the demands and likes of American citizens can be different those of the wants of consumers in Australia, Europe, Asia, South America, or Africa. Therefore, it becomes crucial for a company to tailor its products in a manner that is at par with the specific requirements of the customers.
Overcoming the challenges
The challenges confronted in changing strategy from global to transnational strategy can be overcome by having a superior balance involving decentralisation and centralisation strategies. The centralisation resolutions should be included at both the streams (upward and downward) of the process. Additionally, this is also related to the kind of product or service that the firm deals in.
The activities of competitors and the significance of overseas process also have an impact. In addition, centralisation should offer efficiency and support varied priorities and needs. It is obvious that as the firm gets more inclined towards offering better customer service, it starts getting away from the centralisation process (Gelsomino 2011).
In addition, a firm needs to localise and customise their overseas market. The services and products should be flexible to promote customisation of local markets. Moreover, collaboration between overseas units and headquarters needed (Marulanda 2010). To reduce this, rotating employees in their units, encouraging managers to implement, and cultivate a firm’s objectives and cultures.
Conclusion
In concluding, it is understood that the shift from global to international strategy takes time and is encountered by certain qualms, hindrances and challenges. However, the management of a firm needs to inculcate some form of urgency so as to implement the transnational strategy successfully.
This can be achieved through the implementation and refining of organisational processes so as to accomplish the preferred results. The firm needs to provide rational and a combination of set of activities like marketing strategies, regulating a firm’s dealings, and amalgamating markets in competitive situations so as to sustain the market.
Additionally, a firm has to concentrate on value-adding activities in premeditated locations in the global market, and in exploiting multinational operations, a firm has to coordinate their value-chain activities well (Marakas & O’Brien 2011, p. 78). A firm guarantees a better global performance by implementing transnational strategy that is aligned to the internal and external institutional wherewithal and forces.
References
Gelsomino, J. M. 2011, Transnational Companies: Keys to a Successful Globalization Strategy, Yahoo Voices. Web.
Gorindarajan, V. & Gupta, K. 2003, Global Strategy and Organization, John Wiley & Sons Publishers, NY.
Marakas, M. & O’Brien, A. 2011, Management Information Systems, McGraw-Hill, Irwin, MA.
Marulanda, J. 2010, Transnational Operations, Company of the Future. Web.