Transnational companies' and radical transformation processes: A study of performance in comparison to other multinational companies

TRANSNATIONAL COMPANIES’ AND RADICAL TRANSFORMATION PROCESSES: A STUDY OF PERFORMANCE IN COMPARISON TO OTHER MULTINATIONAL COMPANIES by Jorge Alejandro Palacios The objective of this study was to answer the following question: Do organizations that were defined as having successfully adopted the transnational model, as per Bartlett and Ghoshal (1989), and labeled as transnational companies (TNC), perform significantly better than other multinational companies (MNC) when going through radical transformation processes? This research question was answered through a mixed method research design. The first part used a quantitative research approach and evaluated the financial performance of TNCs selected from the Bartlett and Ghoshal (1989) research, using secondary data sources from 6 TNCs and 20 MNCs. The second part used a qualitative approach based on empirical research to answer the question, “What is happening now, 25 years later? ,” through three in-depth interviews. Qualitative data was analyzed to discuss the contribution of the characteristics of TNCs to the performance of these organizations and their capacity to successfully go through radical transformation processes. The term, transnational, as a type of MNC that was introduced by Bartlett and Ghoshal (1988) and expanded by Zanfei (2000), served as the theoretical basis for this study. TNCs have differentiated characteristics, such as an integrated network structure, where complex coordination and knowledge-sharing processes are in place; resources and capabilities are distributed among different sites; and information, technology, and resources flow among interdependent units. This research contributes to bringing the discussion of TNCs back to the forefront of international business strategy research by assessing the applicability of certain elements of the “transnational solution” (Bartlett & Ghoshal, 1998) as an evolutionary next step for MNCs that seek long-term sustainable grow. Several directions are suggested for future research, including mapping performance variations over a longer period of time in combination with strategic content analysis; studying the consistency in share price and revenue performance among TNCs as a differentiating factor when compared to other MNCs; and understanding the increasingly predominant role of regions and regional offices in the organizational model of multinationals. Finally, this research further reinforces the suitability and additional depth brought by the application of mixed method research models to academic research in the field of international business. ACKNOWLEDGEMENTS I am sincerely grateful to my dissertation chairperson, Dr. Barry Barnes, whom I have had the privilege to enjoy as a friend, professor, and mentor for about 15 years. Most importantly, Barry’s approach to life of staying true to his principles and passions was a key inspiration to start this journey in the first place. I was fortunate to have had an amazing lineup of academic superstars in my dissertation committee; Dr. Ruth Clarke and Dr. Thomas Griffin have guided me through this process with generosity, candor, and their deep academic and life experiences. Thank you Barry, Ruth, and Tom! As much as I am proud to have completed this journey, I am also aware that this would not have been possible without many helping hands and brains from “my” school’s leadership officials, faculty members, departmental staff, and fellow doctoral students, especially Joe Pineda, Kristie Tetrault, and Frances Parker. I am proud to call myself an alumnus of the H. Wayne Huizenga School of Business and Entrepreneurship at Nova Southeastern University. I am grateful to my family and friends who have always been attentive to my progress. My heartfelt thanks to my parents for enabling me to be exposed to an unbelievable amount of places, people, and experiences; the desire to keep learning motivated me to embark on this program. I am also happy to “join the club” and be able to put the word “Doctor” next to my name, as do my father and my brother. Saving the best for last, completing this journey with success is dedicated to my wife, Catalina, for supporting me in every way possible. Without her pushing, pulling, cheering, listening, and guiding me, I would have never reached the finish line of this race of endurance. As far as I am concerned, this degree is as much hers as it is mine. To our daughter and son: I can only hope that mom and dad’s diplomas are a motivation for you to pick up where were are leaving off, and go much further. In closing, all I can say, for anyone interested, is that . it was fun!