First, the structure of competition is undergoing a profound change. Competitiveness is moving rapidly from a national to an international – indeed, global-scale. It is clear that, even with government purchasing, fewer segments of industry remain defensible at the national level in, for example, consumer electronics, telecommunications, transport technology and power engineering; and there is a growing list of sectors where companies are experiencing the benefits of value-added from design to sales. In some sectors, it can be in terms of designing products for many markets, thus lowering production costs earlier than is possible for purely national forms (worldwide designs can cover 80 per cent of customer needs, with 20 per cent for local adaptations). Secondly, competitive advantage, as the basis for strategy, must rest on some clear sustainable product or market factor, controlled by the firm, which is superior to what other companies can offer or deliver. This can Continue reading
International Business
International Business Management deals with the maintenance and development of a multinational operation across national borders, whose manager has the knowledge and the skills to manage and handle cross-cultural processes, stakeholders and business environments in a right way.
Internationalization Strategy Selection
Choice of the strategy does not consist merely of a collection of isolated decisions on products, markets, channels, partners and operation modes. These decisions are also core issues of a competitive strategy. Therefore, the choice of a strategy is all about choosing an appropriate framework for the growth and internationalization strategy for the company‘s competitive success. That is, the choice of strategy must be understood within the context of strategic planning. The strategy of the firm is concerned with matching a firm‘s resources and capabilities to the opportunities and challenges arising from the external environment. This could just as easily be restated as, €•The choice of the growth and internationalization strategy is concerned with matching a firm‘s resources and capabilities to the opportunities and challenges arising from the external environment. According to the view adopted here: “The central task of strategic planning is defining, building, utilizing, maintaining, and developing a Continue reading
Importance of International HRM
Various threats generated by the liberalization of an economy can be met only through bringing corresponding changes in management practices including practices related to International HRM. In the newer management practices, more emphasis has been given to International HRM because of the following factors: 1. Emphasis on Core Competency. Post-liberalization, many organizations have started focusing on their core competence and businesses are being organized around that. Core competence is a unique strength of an organization that may not be shared by others. This may be in the form of unique financial resources (finance available at a much lower cost), manpower resources, marketing capability, or technological capability. If the business is organized on the basis of core competency, it is likely to generate competitive advantages. Because of this reason, many organizations have restructured their businesses-divesting those businesses which do not match core competence such as Tata Group divesting many businesses and Continue reading
Implications for International HRM
Diversity of various types in a global company suggests that HRM practices have to be tailor-made to suit the local conditions. Such practices can be seen in the context of different HRM functions. Recruitment and Selection A global company has the following alternative approaches to recruitment and selection of employees: Ethnocentric-all key positions, in headquarters as well as subsidiaries, are staffed by parent-country nationals. Polycentric-key positions in subsidiaries staffed by host-country nationals and those in headquarters staffed by parent-country nationals. Regiocentric-key positions staffed by host-country nationals within particular geographical regions (such as continent-wise). Geocentric-key positions in headquarters as well as subsidiaries staffed by people based on merit, irrespective of their nationality. Different MNCs adopt different approaches for recruitment. For example, a survey of recruitment practices adopted by MNCs reveals that 50 per cent MNCs believe in geocentric approach while 35 per cent MNCs believe in ethnocentric approach and key functionaries Continue reading
International Human Resource Management (IHRM) – HRM from an International Perspective
International Human Resource Management International Human Resource Management (IHRM) involves ascertaining the corporate strategy of the company and assessing the corresponding human resource needs; determining the recruitment, staffing and organizational strategy; recruiting, inducting, training and developing and motivating the personnel; putting in place the performance appraisal and compensation plans and industrial relations strategy and the effective management of all these functions from an international perspective. The strategic role of HRM is complex enough in a purely domestic firm, but it is more complex in an international business, where staffing, management development, performance evaluation, and compensation activities are’ complicated by profound differences between countries in labor markets, culture, legal systems, economic systems, and the like. It is not enough that the people recruited fit the skill requirement, but it is equally important that they fit in to the organizational culture and the demand of the diverse environments in which the organization Continue reading
The Effects of Globalization on Multinational Corporations
Globalization is the competition in an international market. The growth rate of developing nations and their acquisitions of previously first-world owned corporations indicates that the developed world no longer has the upper hand economic growth in the west has been miniscule in comparison. Success in this new global market requires the ability to accommodate the different needs of diverse consumer groups. Companies can achieve this through product and process innovations and maximize profits. Entrepreneurship is also increasingly recognized and as an alternative course to fortune as opposed to trading rare commodities. Companies from emergent economies are following the lead of their developed counterparts, issuing stocks and encouraging investment. This encouraged growth and share appreciation, surpassing past expectations. Some emerging companies’ growth has even outpaced well-known multi-national companies (MNCs) from the developed world-competing, acquiring and exploiting the endeavors and experiences of first-world MNCs. Similarly, developed nations are tapping into emerging economies, Continue reading