Briefly describe the two levels of global strategies.
According to Frynas & Mellahi (2015), the two levels of multinational organization are headquarters level strategies and subsidiary level strategies. As the name of these strategies suggest, these strategies are formulated either at the headquarters or at the international subsidiaries. In the following, I will explain both level strategies in depth.
Headquarters level strategies
These strategies are made at the headquarters of a multinational organization. These strategies are related primarily to the expansion or other international operations of the organization. These strategies deal with the different subsidiaries from a broader view preparing guideline for them instead of trying to control their daily operations. These strategies are at the corporate level and hence also called corporate level strategies. The corporate level strategies could be used to define different international markets and set profit targets to the different subsidiaries. These strategies are used to define “what business” the organization should compete in in an international market.
Subsidiary level strategies
These strategies are important to run the operations of the subsidiaries of a multinational organization. The subsidiaries are mostly given the freedom to formulate country specific strategies as the headquarters level strategies may not be able to assess the on ground situation in a country distinct from the headquarter being in a different country. The subsidiary level strategies are used to give an extension to the “what business” question in the headquarters level strategies and define “how” to position itself among the local competitors. The local managers and other administrators assess the quality of different strategies formulated at the subsidiary level.