Transnational Management Assignment

Leslie Fithugh

Written Assignment

Part-time professional course:

DMS –

Diploma in

Management Studies

Hand in between:

9.00am & 5.00pm Room 89/90, Administration Office, ground floor;

5.00 – 8.00pm Main Reception desk

before or on

9th May 2008

Students name: Tasha Dyson.

I confirm that this is my own work.

Signed ………………………… Student

Transnational Management Assignment 2

1. Critically examine the approach taken by P&G managers to the challenge of expanding their operations outside the USA. Would you describe their mentality as international, multinational, global or transnational? Using module theory, outline some of the management challenges facing P&G through adopting this mentality.

To understand the mentality of P&G’s managers we must first understand the four types of company operating foreign interests. A Global company tends to ignore local needs and develops new technology at its headquarters that is then disseminated to subsidiaries. This approach has cost advantages through economies of scale and global scale operations. Therefore it ‘operates as a worldwide integrated system in which all its operations are interdependent in terms of operations and strategies’ (Holden, 1990)

Multinational companies do the reverse allowing subsidiaries to determine management style and respond to local product needs, the headquarters deal only with financial policy. Stoner and Freeman define a multinational company as ‘a large cooperation with operations and subsidiaries spread in more than one country, but controlled by a central headquarters’ (Stoner and Freeman, pg771).

International companies control management systems and marketing policy from headquarters, products are developed for the home country market and then extended to countries with similar market needs. Technology and knowledge is transferred to the overseas operator to manufacture offshore and therefore protects the home market.

‘Transnational companies...