Transnational It Operations Essay

1014 words - 4 pages

PAGE PAGE 1 Running head: TRANSNATIONAL IT OPERATIONS
Transnational IT OperationsUniversity of PhoenixCMGT/578 CIS Strategic PlanningFebruary 7, 2011Transnational IT OperationsA transnational company is a corporation that is registered and operates in more than one country at the same time (West's Encyclopedia of American La., n.d.). A transnational corporation has its headquarters in one country and operates wholly or partially owned subsidiaries in one other, or many other countries. Some companies will outsource a portion or sometimes all of their Information Technology (IT) functions to a foreign country for a verity of reason. Companies that move a portion of their operations, such as IT, need to investigate the advantages, disadvantages, and tradeoffs of moving a critical component of their business operations to a foreign market.Aspects and IssuesWhat business owner would not want to jump impulsively at the chance to access foreign capital, increased resources, and access cheaper labor? However, there are barriers, consider the obstacles encountered in the domestic management of an IT department. Take those obstacles and move them to a new culture in another country, then add economic regulations, lack of local Technological infrastructure, Language barriers, and possible political turmoil (IT world, 2001). Those benefits seem to diminish with this mix added in, and this is just the beginning.Other considerations will include the local customs. Does the local population of the area chosen work well with time constraints? Will religious rites, customs, and traditions interfere with the business goals or productivity desired? Will quality and control standards be able to be enforced? Based on some wide eyed news reports global expansion seems nearly impossible. However, based on evidence to the contrary, creating a transnational operation is not impossible, in fact the current economic model is global with transnational companies expanding.AdvantagesEconomic conditions or cost structure have made locating or relocating facilities in a foreign country beneficial. The cost of land and building is a benefit that has a strong economic draw to business. Also the maintenance to keep these facilities is lower than domestic rates. Along with these lower costs of facilities are the lower cost of employment wages and labor. However, the company needs to acquaint itself with the culture it is moving to as some cultures do consider pay rates important and other cultures consider training and knowledge equally important or even more important (Jamie Marulanda, 2010).Other factors creating a beneficial scenario for a company to transfer some, or all, of its IT workload to a foreign country is the flexibility of the service language spoken. Many countries teach students multiple languages during education. These different languages can give companies the flexibility of providing their customers with different language options from which to choose....

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