solution

1. Barlett & Beamish state, “Today every firm must meet the challenges of managing strategies, organizations, and operations that are increasingly more complex, diverse, and uncertain than during earlier times—and do so within the confines of their administrative heritage.¹ [The prime drivers of administrative heritageinclude (i) the motivations that lead a company to expand abroad, (ii) the process of internationalization that it follows, and (iii) the typical mentality that it develops.] Thus, MNEs are now forced to develop a more complex array of strategic capabilities (including structure) that allow them to achieve sustainable competitive advantages, i.e., firms must develop layers of competitive advantage—global scale efficiencies, multinational flexibilities, and the ability to develop innovations and leverage knowledge on a worldwide basis—and attain all three goals simultaneously.

¹an organization’s strategic and organizational history, including the con-figuration of its assets, the evolution of its organizational configuration, the strategies and management philosophies the entity has pursued, its core competencies, and its corporate culture.

Question: Discuss the challenges of developing layers of competitive advantage in light of the realities of cultural, political, geographic, and economic differences/distance. Include an examination of the various roles that administrative heritage might play in shaping the strategic and organizational capabilities of a firm—especially those of a transnational.²

²Important characteristics of a transnational organization are: decision-making roles and responsibilities that legitimize multiple, diverse management perspec-tives; a structure based on assets and capabilities that are both distributed and interdependent; and internal, integrative processes that are robust and flexible.