A transponder is an essential requirement for most airspace; certainly for commercial air transport. If it is unserviceable before departure you must get it fixed. If you can't get it fixed where you are, you may be allowed to fly to the nearest airport where you can get it fixed. If it fails in flight ATC will try to get you to your planned destination if they can without undue risk. This question specifically states that the transponder "appears to be unserviceable prior to departure and repair is impossible".