Understanding the process of changing from an international into transnational status is essential for the success of ACME. The process is a complex one since the level of expertise required for managing transnational organisations is higher that for managing international organisations. International organisations are exporters and importers, and they do not invest in foreign nations. Transnational organisations investment in other countries and have central corporate facilities.
Currently, ACME Computers has no investment outside the United States. In addition, the intranet company has no legal rights to invest abroad. However, as an international company, it has sufficient knowledge regarding management of cultural and social diversities.
For ACME Computers to transform into a transnational organisation, it needs to carryout research to determine the best market for its products prior to applying for trade permit. According to Gotz and Haggren (2009), organisations planning to invest globally should assess the impact of cultural, economic and legal factors on their business strategies. Subsequently, they need to seek permission to invest in foreign countries from those particular countries.
ACME will need to reorganize its management structure to accommodate the interest of new stakeholders and meet new objectives of the business. The organisation needs to amalgamate domestic and international components of the business through all its ranks of leadership (Helpman, 2011). In addition, the organisation should develop effective systems for managing virtual teams and social cultural diversities over an extensive geographical space to accommodate expertise from around the world.
Transnational organisations need to consider implications of cultural, social, legal factors on their operations. The intranet organisation should develop strategies that can sustain business continuity and reduce the consequences of risks such as fire outbreak or flooding. Operating a number of head offices in different countries makes it exceptionally easy to restore operation in an office that has been affected negatively by various factors by utilizing resources in other countries.
Transnational organisations have the ability to manage risks more easily (Linton, 2012). They use cost structures in foreign countries that are lower than cost structures available domestically. They trade in countries with competitive currency exchange rates to experience lower property prices and low employment wages. The intranet organisation, by investing in other nations, will have the opportunity to determine cost-effective structures.
Managing social cultural diversities effectively in a transnational organisation is useful for helping enhance communication flow, interdependence among corporate structures and policy adaptation. In addition, comprehending attitude and norm differences of various groups of employees and building on the study of management experts is critical for the success of transnational organisations (Coleman and Underhill, 2002).
ACME need to have plans to manage social differences. An effective solution is integrating essential elements of culture into development plan, communication and its code of conduct. Notably, ACME will need to meet the demands of more global clients. As a result, it will have to improve information sharing to build and sustain market leadership. Deloitte invested in a global intranet. It enhanced information sharing and has built and maintained it position a market leader (White, 2011).
Legal considerations also have an impact in the success of the intranet organisation. The United States has strict laws on information privacy. Countries have different laws governing privacy. The organisation should ensure it complies with all necessary laws to increase chances of meeting its trade objectives (White, 2011).
Notably, global integration and local acuity will play an essential role in enabling the organisation to meet its targets. The world has become integrated through advancements in communication, transportation, and technology. Hoekman (2006) says that improvements in science and technology make it easy for international entities to transform into transnational entities. Globalisation enables transnational organisations such as ACME to take advantage of the low cost of labour in developing countries and maximize profits.
However, since certain regions are sufficiently endowed with resources while others are not, the organisation should have local acuity to understand different market segments. It should understand the strengths and weaknesses of local employment pools by carrying out analysis on technical knowledge and expertise among employees.
This is essential for evading the consequence of inability to fill certain positions that require high degree of technical proficiency. ACME should also evaluate the impact of language barriers, cultural differences, legal retirements and political atmosphere on its business operations. These factors can lower the quality of work and lead to business failure (Marulanda, 2010).
The process of transforming from international organisation to transnational organization status requires the organisation to have an in-depth understanding of the global market and work closely with host countries. ACME should comply with regulation imposed by the host countries. The organisation should also have enough resources to manage its virtual stakeholders and trade cost-effectively.
Coleman, W. D., & Underhill, G. R. (2002). Regionalism and Global Economic Integration Europe, Asia, and the Americas (Taylor & Francis e-Library ed.). London: Routledge.
Gotz, N., & Haggren, H. (2009). Regional Cooperation and International Organizations: the Nordic model in Transnational Alignment. London: Routledge.
Helpman, E. (2011). Understanding global trade. Cambridge, Mass.: Belknap Press of Harvard University Press.
Hoekman, B. M. (2006). Global Integration and Technology Transfer. Basingstoke [England: Palgrave Macmillan.
Linton, I. (2012). Transnational IT Operations as a Strategy | Business & Entrepreneurship – azcentral.com. Business & Entrepreneurship – azcentral.com. Retrieved from https://yourbusiness.azcentral.com/transnational-operations-strategy-4238.html
Marulanda, J. (2010). The Company of the Future | Transnational Operations. The Company of the Future. Web.
White, R. (2011). Transnational Environmental Crime Toward an Eco-global Criminology.. Hoboken: Taylor & Francis.