Answer to Question #284730 in Marketing for Beah

Question

Describe the organizational architecture that a transnational firm might adopt to reduce the cost of control

Answer 1

A transnational corporation, like all multinational companies, can apply bureaucratic and output restrictions to some level. However, due to performance issues, the use of output controls is restricted. When there are several lines of authority, bureaucratic controls are less effective. One method to address this difficult issue is to provide incentives for cooperation. Another important factor is the creation of a strong culture. This culture could boost collaboration by encouraging managers to buy into high-performance standards and value systems. Managers from interdependent sub-units might be motivated to look for solutions to solve any difficulties that develop as a result of such a culture. Lower control expenses would result from a strong, success-oriented culture.