Bartlett and Ghoshal (1991) identified four distinct

types of multinational corporations (MNCs), which are

depicted in the image at the end of this article. These
four types can be seen to illustrate, which strategic out-
look MNCs have towards managing their subsidiaries,
and how these MNCs balance the potential needs of
global integration and global differentiation. Each
MNC should ideally choose the strategic model that
satisfies the needs of the environment, and chose the
strategic model that will secure global competitiveness.

The Bartlett & Ghoshal Model indicates the strategic

‘Local responsiveness’ =
- Do customers in each country expect the product to be adapted to meet local requirements?
- Do local (domestic competitors) have an advantage based on their ability to be more responsive?
‘Global integration’ =
- How important is standardisation of the product in order to operate efficiently (e.g. economies of scale)?
- Is consistent global branding required in order to achieve international success?

1. ‘Global Strategy’ (low pressure for local responsiveness, high pressure for global integration) =
- Highly centralised
- Focus on efficiency (economies of scale)
- Little sharing of expertise locally
- Standardised products
2. ‘Transnational Strategy’ (high pressure for local responsiveness, high pressure for global integration) =
- Complex to achieve
- Aim is to maximise local responsiveness but also gain benefits from global integration
- Wide sharing of expertise (technology, staff etc.)
3. ‘International Strategy’ (low pressure for local responsiveness, low pressure for global integration) =
- Aims to achieve efficiency by focusing on domestic activities
- International operations are largely managed centrally
- Relatively little adaptation of product to local needs
4. ‘Multi-domestic Strategy’ (high pressure for local responsiveness, low pressure for global integration) =
- Aims to maximise benefits of meeting local market needs through extensive customisation
- Decision making decentralised
- Local businesses treated as separate businesses
- Strategies for each country

————— However, Bartlett and Ghoshal posits that many MNCs will have to adopt the transnational strategy, be-
cause the competitive forces of almost every industry is increasing, due, in part, to the intense globalisation occurred dur-
ing the last decades. Many modern MNCs will therefore, most likely, need to choose a transnational strategy, because
many MNCs must master both the art of cost reduction and local differentiation to maintain its competitive edge.