Submitted by: Submitted by benprater
Views: 265
Words: 572
Pages: 3
Category: Business and Industry
Date Submitted: 03/04/2013 01:50 PM
Philips and Matsushita, global electronic manufacturing giants, came to success with two very different strategies – Philips with a worldwide portfolio of responsive national organizations and Matsushita with centralized, highly efficient operations in Japan. Through various restructuring efforts, both companies have tried to implement traits of transnational organizations; however, Philips seems to be the company that best upholds the ideals of a transnational organization.
Philips started with a focus on a single product: light bulbs. In an attempt to create local ventures to gain market acceptance once the electric lamp industry began to show signs of overcapacity in the 1920s, Phillips began to abandon the traditional European business model of a highly centralized company and opened decentralized sales organizations throughout the world. During the war, these national organizations started to become more independent, a key trait of transnational organizations. These NOs were able to respond to nation-specific demands and adapt to the market accordingly. An example of this can be seen with Philips’ venture into the television production market. NOs were able to produce televisions based on the local transmission standard (PAL, SECAM, and NTSC) and consumer preferences (contemporary models in some markets, and furniture-encased sets in others). Compare this to Matsushita, who at the time still operated mainly in Japan with a “one product, one division” mentality. The strength of Philips NOs also helped product development; color television was created in Canada, stereo television was created in Australia, and teletext televisions were created in the UK. Matsushita, with its centralized company strategy often lagged behind in terms of innovation and often rushed to copy the technologies of competitors.
In terms of management structure, Philips more closely aligns with the structure of a transnational organization. Philips’ NOs were in charge of financial,...