Transnational

Transnational. Finally, a transnational corporation attempts to achieve the local responsiveness of a multinational corporation while also achieving the efficiencies of a global firm. To balance this “global/local” dilemma, a transnational uses a network structure that coordinates specialized facilities positioned around the world. More specifically, transnational corporations use geo-diversity to great advantage, placing their top executives and core corporate functions in different countries to gain a competitive edge through the availability of talent or capital, low costs, or proximity to their most important customers. Of course, it is all made possible by the Internet, as improved communication facilitates an integrated global network of operations.

By using this flexible structure, a transnational provides autonomy to independent country operations but brings these separate activities together into an integrated whole. For most companies, the transnational form represents an ideal, rather than a reality. McDonald’s is an example of a transnational corporation, especially with culture-specific food items, like India’s vegetarian McAloo Tikki, the McKebab in Israel, or a Hawaiian Deluxe Breakfast complete with span, rice, eggs, and hash browns. With over 31,000 restaurants across 119 countries serving 58 million people each day, it makes sense that McDonald’s overseas revenue makes up nearly 65 percent of their total revenue, and that they cater McDonalds’ core burger-fries-and-shakes menu to local tastes.

The development of transnationals has led to a fundamental rethinking about the nature of a multinational company. Does it have a home country? What does headquarters mean? Is it possible to fragment corporate functions like HRM glob- ally? To be sure, organizational structure directly affects all HRM functions from recruitment through retirement because to be effective, HRM must be integrated into the overall strategy of the organization. Indeed, from the perspective of strategic management, the fundamental problem is to keep the strategy, structure, and HRM dimensions of the organization in direct alignment  while being respectful of local country laws or regulations.