What is the Difference Between Multinational and Transnational?

The main difference between multinational and transnational corporations lies in their management structure and focus on local responsiveness. Here are the key differences:

• Definition: Multinational corporations have assets and facilities in one or more countries, other than their home country, and have a centralized office where global management is coordinated. Transnational corporations, on the other hand, operate in multiple countries without a centralized management system and focus on maintaining high levels of local responsiveness.
• Management Structure: Multinational corporations have a centralized management structure, with a single headquarters coordinating global operations. Transnational corporations are more decentralized, with many bases in various countries, allowing for more local decision-making.
• Operations: While multinational corporations typically have locations or facilities in multiple countries, each location functions somewhat independently. Transnational corporations, in contrast, maintain a strong focus on local responsiveness and adapt their operations to each country they operate in.
• Examples: Some well-known multinational corporations include McDonald's, Coca-Cola, and Nike. Transnational corporations, such as Nestlé, Unilever, and Shell, are characterized by their decentralized management structure and focus on local responsiveness.

In summary, while multinational corporations have a centralized management structure and function more independently in each country, transnational corporations are more decentralized and focus on local responsiveness in the countries they operate.

Comparative Table: Multinational vs Transnational

Here is a table highlighting the differences between multinational and transnational corporations:

Both multinational and transnational corporations operate globally and have subsidiaries in other countries. They also provide local services in addition to manufacturing, which results in an impact on employment, quality of life standards, and earnings for households.