What does 'MNE'S need to be both global and local?' mean

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What does 'MNE'S need to be both "global" and "local"?' mean

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Abstract

Since the rise of liberalisation with the opening of markets in the mid 1980's, the business world has entered the era of globalisation where companies have dramatically expanded their business abroad. Indeed, the abolition of barriers of entry was one of significant opportunities for multinational enterprises to gain more market shares by sustaining their competitive advantage on a broader scale. However this situation of globalisation has shifted to a new period called the "semi-globalisation". In fact this expression quoted by Panos Mourdoukoutas highlights the new constraints imposed to most of multinational enterprises (MNE's). In fact new pressures have transformed the global competitive framework, forcing companies to rethink their traditional worldwide strategic approaches. Thereby they are nowadays doomed to be both globally efficient and locally responsive by adapting some elements of their strategy mix to the host country where they operate.

Introduction.
Key sources of the transnational structure.
1. Competitiveness through global efficiency.
2. Flexibility through local responsiveness.
3. Learning as part of the innovation process.
Side effects of the transnational structure.
1. Tight complex controls and coordination.
2. The administrative heritage.
Towards a new approach of the transnational structure.
1. A necessary understanding of the strategy.
2. More a way of management.
Conclusion.
References.

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[...] Thus the need to cater to local interests and tastes is of major importance, hence capturing local opportunities “niche market” often considered as very profitable. The example of the Macdonald strategy is particularly relevant as the food industry is all the more sensitive to national differences. While adopting a global strategy with the standardisation of operation and distribution, the fast food company varies its menus taking into account the religious beliefs or the local food tradition. For instance, in India, the hindese population does not eat beef as the cow is considered to be a sacred animal regarding the religion. [...]

[...] This essential question can be determined by understanding the management's philosophy and the firm's ability to adjust to organisational changes. In addition, the relative importance of international operations, past history and experience in the international arena will give a clearer overview on what the company wants to achieve compared to its competitors. Conclusion With the emergence of new imperatives created by the information age and the knowledge revolution and the coming of the service based economy, worldwide companies have to deal with the forces of globalisation in a different way. [...]

[...] As Barlet and Ghoshal quotes Rosabeth Kanter argument, national subsidiaries become constrained by this so-called “entrepreneurial a mentality in which need to be the source, the originator leads people to push their own ideas single-mindedly”. Conversely corporate complacency is also a threat to transnational organisation in that extent national units could be constrained to adopt a unanimous corporate strategy without taking into account the diverse strategy of national units. Yet controls exist to ensure the best coordination possible, it is still difficult to manage at the same time such intense horizontal and vertical flows of technology, finances, people and materials between interdependent units. [...]

[...] Indeed some type of industries does not necessarily need to compete on the three advantages we have discussed in the first part. The high technology area for instance will much rather seek for standardised products as the food industry will be compelled to have differentiated products in order to meet the customer requirements. The other critique that we can put forward is the little attention paid to the embeddedness of strategy in its social context. In fact, the strategy of one's firm has been for a long time implemented and thereby it is hard to change its respective structure over a period of time. [...]

[...] A necessary understanding of the strategy This following goal which was defined in 1998 by the CEO of the company ABB, Barnevik as be global and local, big and small, radically decentralized with central reporting and control” seems in reality hard to achieve. In fact, Barlett and Ghoshal acknowledge the fact that they saw none of the companies in their study as a genuine transnational company as they defined it. As regards the goal as inherently unattainable, the companies analysed were trying at least to achieve one of its objectives either to compete on the basis of scale efficiency or to respond to national market or to transfer specialised knowledge. [...]

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