Cross-Cultural Management: The Superiority of Transnational Strategy

This essay examines the role and effectiveness of the transnational strategy for multinational companies (MNCs) in the post-COVID-19 world, considering the challenges posed by political protectionism and technological threats. It evaluates whether the transnational strategy, which balances standardization and local adaptation, remains superior in the current global landscape. The analysis covers the advantages of the strategy, such as cost reduction, market penetration, and cultural understanding, while also addressing the difficulties in its implementation. The essay further emphasizes the importance of understanding local markets, promoting knowledge sharing, and adapting business goals to leverage the benefits of the transnational strategy for sustainable growth and competitive advantage in the international market.

Cross-cultural
Management
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Abstract............................................................................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
The ‘transnational’ strategy (Bartlett et al. 2008 1 ) has been hailed as a superior type of
international strategy in the context of the wave of hyper-globalization that took place from
the late 1980s onwards. The Covid-19 crisis, combined with political protectionisms and
global technological threats, can be seen as challenging this wave of globalisation. In the
postCoronavirus world, is the transnational strategy still a superior strategy for multinational
companies (MNCs) in your opinion? Justify your position...................................................3
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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Abstract
Cross cultural management is acting as important element for an organisation to manage
business activities across various locations in effective manner. With the help of managing
international activities with cross culture management strategies companies can have access of
long term growth and better management of operations. This report identifies importance or
significance of the transnational strategy post covid-19.
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INTRODUCTION
Cross-cultural management is defined as a study of management in a cross-cultural context.
It is essential for business organizations that are performing their roles and responsibilities on an
international platform to have deeper and in-depth knowledge of cross-culture to identify the
influence of culture society and other factors on organization activities and profitability
(Aggarwal and Wu, 2021). The present report is conducted on the analysis of the importance of
transactional strategy post-covid-19.
MAIN BODY
The ‘transnational’ strategy (Bartlett et al. 2008 1 ) has been hailed as a superior type of
international strategy in the context of the wave of hyper-globalization that took place from
the late 1980s onwards. The Covid-19 crisis, combined with political protectionisms and
global technological threats, can be seen as challenging this wave of globalisation. In the
postCoronavirus world, is the transnational strategy still a superior strategy for
multinational companies (MNCs) in your opinion? Justify your position.
Managers face major concerns in deciding the global strategy to expand their business services
for long-term growth and profitability. It has been identified the transactional strategy is a
combination of standardization strategy as well as a multidomestic strategy. This strategy is
being used by the organization when they are facing significant cost pressure from international
competitors and offer that products and services to fulfill local consumer needs (Bohas, Morley
and Kinra, 2021). It has been evaluated that this strategy is difficult to maintain as this
organization is required to fulfill economies of scale with the help of standardization and also
required to be flexible to fulfill local needs. There are several advantages of translational strategy
such as creative business opportunity, better market penetration, lower cost, more efficiency, and
better culture of understanding. Furthermore, it has been identified that transitional strategy is a
superior type of international strategy in terms of the wave of hyper-globalization which
undertake place from late 1980 onwards. Due to the outbreak of covid-19, the combination of
political protectionism and global technological threats are several challenges in this wave of
globalization. Post-covid 19 transactional strategies can be superior for multinational companies
as if an organization is operating on a transaction they opportunity of lower cost of labor. This
with the help of taking advantage of software development organizations can save by having
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their production done by an overseas subsidiary (Fakhreldin, Youssef and Anis, 2021). Along
with that has been identified that post-covid 19 this strategy can provide a fruitful advantage to
the organization in which they can effectively recognize their companies so that they can earn
profit in a subsidiary located in a foreign country with lower taxes. It has been evaluated that a
homogenous methodology may be useful for an organization going worldwide as the business
will acquire international brand recognition as well as economies of scale. This has been
underlined that if organizations seek to be successful in the international platform, then they need
not ignore the advantages that local adaptation will provide them. There ought to be strategies
and activity designs that characterize how much transnational strategy is required to be carried
out in the business. In its actual structure, a transnational structure will be worldwide in nature
however will likewise profoundly include the mix of local adaptations and requirements as
indicated by the country the MNE expects to enter. Many organizations don't accomplish a
transnational strategy in its genuine structure (Boussebaa, 2015). They either become too multi-
homegrown and excessively worldwide without enough coordination. It is really difficult for
global undertakings to settle fair and square of restriction and normalization and the way to make
a successful and effective harmony between the two. here is pivotal importance for MNEs of
having broad information and comprehension of the objective nearby market. Without the nearby
information, organizations can bomb in this manner, cautious interest in acquiring the
neighbourhood information and comprehension is fundamental for aggregating an essential field-
tested strategy and its execution. As referenced before, elements like societies, ways of life,
buyer conduct and mentalities, standards, shopping examples, and others assume a crucial part in
distinguishing the extent to which variation will be expected of an MNE to effectively set up and
maintain their business in the neighborhood market. Even though there is not duly sufficient data
concerning transnational procedure's mix. It has been evaluated that the transnational strategy is
thriving quickly as an ever-increasing number of global actions shift their concentration from the
extreme way of localization and standardization towards the mid-may transnational way.
In addition to this has been identified that post-covid 19 multinational organization by
undertaking advantage of transaction strategy can take efficient advantages and can perform their
business operations with higher efficiency and lower cost and this is this strategy also provide
creative market penetration opportunity for business, as it is less costly as compared to multi-
strategy (Boussebaa, Morgan and Sturdy, 2012). With the help of this strategy, organizations can
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be centralized as many resources as possible and can maintain the benefits of a multi-domestic
strategy. Furthermore, it has been evaluated that a transnational strategy offers a decent answer
for worldwide undertakings for entering and supporting global business sectors (Kumar, Pandey
and Mukherjee, 2021). Even though there is a rise in the idea of worldwide customers yet how
each nation is diverse in various ways can not be overlooked. In addition to this, it has been
evaluated that, the transnational strategy duly offers a decent mix to take into account the
organization on the multination scale to utilize worldwide economies of scale and worldwide
efficiencies and by adjusting to the nearby necessities. Item way of life stages may likewise be a
critical component to consider among numerous others in the worldwide setting. In any case, the
various leveled structures for worldwide actions would require changes to make the coordination
between the auxiliaries and the central command more incorporated and to upgrade information
dividing structures among and all through the headquarters and nationwide subsidies too
(Ghemawat, 2007). Thus, from the analysis, it has been reflected that transnational strategy will
be effective assuming MNEs figure out the way to effectively adjust the degree of normalization
and the degree of customization. Leaders and manager need to evaluate different parts of the
business that required to be altered while keeping a standard worldwide methodology. This can
be accomplished assuming the organization advances a culture of straightforwardness and
information sharing. In addition to this, executing a transnational strategy for any worldwide
undertaking is a difficult task because keeping up with worldwide efficiencies while acquiring
noteworthy neighbourhood responsiveness is a test in itself. In this, if the organization plans to
accomplish a fruitful worldwide procedure, they are not required to disregard the significance of
the execution of such a system due to the specific impediments as per various regions. The
organizations need to carefully inspect the degree of normalization and variation that is
fundamental because really at that time the combination between the public aides and the central
command will be compelling. Worldwide actions that have perceived this significance
ceaselessly put resources into getting to know the distinctions and likenesses that the
neighbourhood portions of the overall industry with the worldwide market and that the nearby
market separates itself from the worldwide market. In addition, the comprehension of how to
make an equilibrium is essential. This agreement and information will prompt the execution of
an effective transnational strategy in a well-defined and efficient manner (Ghemawat, 2010). In
addition to this post-covid 19 multinational organization can operate a business on the
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international market segment in a successful manner with lower cost, as in this by hiring local
employees who expect lowest salary and wages as compared to the home country of business
organization can work more cheaply.
During lockdown face due to the outbreak of covid-19 business organisation faced many
losses in terms of low level of revenues generation ability, profitability and also face many
challenges to operating the business effectively. In this after covid-19 multinational
organizations by taking advantage of transactional strategy can gain benefits in terms of better
market penetration better form of cultural understanding, lower cost, and creative business
opportunities. It has been underlined that it is not only enough for a business organization to
recover revenues after covid-19. In this to further establish their competitive edge in the
international market segment. It is important for a multinational organization to fundamentally
emphasize its revenue profile and efficiently position itself for the greater competition ahead
(Mahadevan, Ilie and Müller, 2021). In this, the business organization needs to save themselves
by setting up a mindset and testing and research analysis to have better accountability and agility.
In this with the help of implementing transaction strategy organizations can maximize the
efficiency of the decision-making and a well-defined and effective manner and can fulfill the
demand of local consumers efficiently. With the help of an operating transactional strategy, an
organization can make use of local skills resources, and capabilities and can further perform
business in a well-defined and effective manner. The transactional strategy provides a good form
of solution to the multinational organization to sustain in international market segment post-
covid-19, as this strategy offers good integration to fulfill the needs of global consumers by
efficient leveraging on the global economy of scale with the help of adopting global needs. In
addition to this, it has been underlined that transaction strategy offers a significant approach for
organizations to effectively manage the balance of the level of standardized along with
automation level. With the help of the strategy, a multinational organization can carefully
evaluate components that are prevailing in the international market segment post covid and can
maintain a stranded global approach with the help of promoting knowledge sharing and a culture
of transparency. It has been evaluated that the main advantage that relies on a transnational
business plan is that it is more efficient than a multi-domestic technique (Ghemawat, 2017). That
is because it advocates for productivity and worldwide normalization. Furthermore, it has been
stated that resources are pretty much as incorporated as conceivable in a transnational business
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procedure implying that it becomes effective in reducing the creation expenses. In addition to
this, another benefit is the more profound penetration in neighborhood markets. The multi-
domestic strategy also measures advantage however, it has been underlined that organizations
utilizing worldwide techniques and worldwide procedures might struggle to resound with nearby
consumers. Thus, from the analysis, it has been evaluated that the transnational strategy can be
extremely useful to an organization whenever done the right way. However, it has been
evaluated that business organization needs to align business goals, resources, objectives, and
workforce effectively to undertake the use of transactional strategy.
After covid-19 when the government of countries is lifting bans transactional strategy
provides a significant opportunity for business organization, as with the help of making use of
this strategy organization can expand their business services in those areas where there is the low
cost of labor and they can easily allocate resources to offer the products and services to a new
market. MNCs with the help of taking advantage of transactional strategy can take the
opportunity to develop a new market in which they can enhance their revenue generation
capabilities with the help of operating in multiple countries organizations can have benefits in
terms of better brand awareness as well as cash flow (ul Haque and Yamoah, 2021). Along with
this, the greatest benefit of the transnational strategy is that it helps the organization in growing
its business because once an organization embraces this system then the entire world is the
market for the organization's resources and its span enlarges from home country to the entire
world and more extensive the market higher are the odds of the organization creating guard deals
bringing about higher benefits for the business. However, before settling on which sort of
technique of the business to utilize, regardless of whether worldwide methodology global
procedure or multi-domestic technique an organization needs to undertake an effective survey to
analyze the impact of strategy along with its advantages and disadvantages upon business
activities and decision making. Organizations by taking advantage of transaction strategy can
effectively enter a local market more effectively and can further develop a strong consumer base.
Thus, from the above-mentioned analysis, it has been evaluated at post-covid-19 transactional
strategy can still play a superior strategy role for a multinational organization, as this strategy is
significantly less costly as compared to multi-domestic strategy. With the help of this strategy, an
organization can effectively privatize efficiency and global standardization and can make use of
as many resources which helps in cutting cost organizations to successfully operate on
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international platforms. Post covid 19 implementation of transactions strategy also allows
MNCs to enter in a new market segment to create more base of consumers and perform that
business operation with low labor cost. Thus it has been stated that covid-19 affected
organizations in an adverse manner which affected their growth profitability revenue generation
capability (Hansen and Nohria, 2004). This transactional strategy offers a significant advantage
to the multinational organization to make use of transactional strategy and perform higher
efficiency business operations with lower cost and have the advantage of better market
penetration which helps business organizations to develop and form a new consumer base and
create our competitiveness in the industry.
Thus, with the help of undertaking advantage of this strategy, an organization can maximize
their revenue generation capability and can perform their roles and responsibilities while
assuring efficient cash flow and a large number of sources of income (Tuncdogan, 2022). This
will significantly help organizations to ensure long-term sustainability and suitable business
operation activities and overcome the challenges and negative impact that has been imposed by
covid-19 significantly. It helps organizations to ensure long-term sustainability and suitable
business operation activities and overcome the challenges and negative impact that has been
imposed by covid-19.
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CONCLUSION
Thus, from the above-mentioned analysis, it has been identified that to successfully operate
after the covid-19 outbreak organizations need to emphasize the advantages of transactional
strategy, as it allows them to enter a local market more efficiently and develop a consumer base
quickly. With the help of this strategy, organizations can also interact with local employees and
can have a better understanding of culture, and can conduct business operations at a lower cost in
a more efficient manner. Along with this, it has been underlined that this strategy also facilitates
the business organizations to save expenses and cultural understanding. With the help of taking
advantage of the strategy, an organization can significantly diversify their management team and
workforce and can recruit foreign talent which not only helps an organization to maximize their
business competencies but also allows them to perform their roles and responsibilities with
employees of different skills, background, capabilities, talent, and competence.
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REFERENCES
Books and Journals
Aggarwal, R. and Wu, Y., 2021. Cross-Cultural Competence Development for Business
Students.
Bajaj, G., Khandelwal, S. and Budhwar, P., 2021. COVID-19 pandemic and the impact of cross-
cultural differences on crisis management: A conceptual model of transcultural crisis
management. International Journal of Cross Cultural Management,
p.14705958211060189.
Fakhreldin, H., Youssef, N. and Anis, M., 2021. Cross-Cultural Management Education: Core
for Business Students in the 21st Century. Journal of Teaching in International
Business, 32(2), pp.109-134.
Kumar, S., Pandey, N. and Mukherjee, D., 2021. Cross Cultural and Strategic Management: a
retrospective overview using bibliometric analysis. Cross Cultural & Strategic
Management.
Mahadevan, J., Ilie, I.A. and Müller, F., 2021. Cross-Cultural Management in Complex
Organizations: Challenging Dominant Identity Requirements of Mobility and
Commitment. In Intercultural Management in Practice. Emerald Publishing Limited.
Tuncdogan, A., 2022. Cross-Cultural Aspects of Tourism and Hospitality. European Journal of
Tourism Research, 30, pp.1-3.
ul Haque, A. and Yamoah, F.A., 2021. The Role of Ethical Leadership in Managing
Occupational Stress to Promote Innovative Work Behaviour: A Cross-Cultural
Management Perspective. Sustainability, 13(17), pp.1-19.
Bohas, A., Morley, M.J. and Kinra, A., 2021. Perlmutter revisited: Revealing the anomic
mindset. Journal of International Business Studies, pp.1-29.
Boussebaa, M., 2015. Control in the multinational enterprise: The polycentric case of global
professional service firms. Journal of World Business, 50(4), pp.696-703.
Boussebaa, M., Morgan, G. and Sturdy, A., 2012. Constructing global firms? National,
transnational and neocolonial effects in international management
consultancies. Organization Studies, 33(4), pp.465-486.
Ghemawat, P., 2007. Managing differences: The central challenge of global strategy. Harvard
Business Review, 85(3), pp.58-68.
Ghemawat, P., 2010. Finding your strategy in the new landscape. Harvard Business
Review, 88(3), pp.54-60.
Ghemawat, P., 2017. Globalization in the age of Trump. Harvard Business Review, 95(4),
pp.112-123.
Hansen, M.T. and Nohria, N., 2004. How to build collaborative advantage. MIT Sloan
Management Review, 46(1), p.22.
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