Polycentric Approach Case Study

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QUESTION 1 What do you see as the main organizational challenges that are likely to be associated with implementation of a transnational strategy? Discuss with two companies of your choice. A company using a transnational strategy allows it to distribute the same product with the same strategy (for example distribution strategy, marketing strategy) in all countries. An international business structure where a company 's global business activities are coordinated via cooperation and interdependence between its head office, operational divisions and internationally located subsidiaries or retail outlets. A transnational strategy offers the centralization benefits provided by a global strategy along with the local responsiveness characteristic…show more content…
- Ethnocentric fills all key management positions in international business with parent – country nationals. - Polycentric uses host country nationals to manage foreign subsidiaries parent – country nationals for the key positions at corporate headquarters. - Geocentric seeks the best people for key jobs throughout the organization, regardless of their nationality. Ethnocentric approach is an international strategy. Advantages of ethnocentric approach are overcome lack of qualified managers in host nation, unify culture and help transfer core competencies. Disadvantages of ethnocentric approach are produce resentment in host country and can lead to cultural myopia. Polycentric approach is a localization strategy. Advantages of polycentric approach are alleviate cultural myopia and inexpensive to implement. Disadvantages of polycentric approach are limit career mobility and isolate headquarters from foreign subsidiaries. Geocentric approach is a global standardization and transnational strategy. Advantages of geocentric approach are use human resources efficiently and help build strong culture and informal management networks. Disadvantages of geocentric approach are national immigration policies may limit implementation and be very
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