As the organizations continue to grow globally at a rapid pace, nations are increasingly permeable to the international exchange of knowledge, capital, goods and services, giving rise to more complexities and uncertainties. Intensified rate of globalization is evident from the changing trends in foreign direct investment which is increasingly indicating a shift toward developing economies like China and India. Growing internationalization is breaking down organizational and geographical boundaries with business processes and structures undergoing complete transformation. This has brought the role of human resources to the fore as the competitiveness of these organizations is contingent on their ability to adapt and design human resource strategies that can sustain global nuances and dynamics. International human resource management (IHRM) from an organization’s perspective is defined as the effective management of human resources in global markets for multinational companies(MNCs), in order to gain a key source of competitive advantage and to be globally 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.
Country Risk Analysis
Country Risk Analysis is the evaluation of possible risks and rewards from business experiences in a country. It is used to survey countries where the firm is engaged in international business, and avoids countries with excessive risk. With globalization, country risk analysis has become essential for the international creditors and investors. Country risk analysis identifies imbalances that increase the risks in a cross-border investments. Country risk analysis represents the potentially adverse impact of a country’s environment on the multinational corporation’s cash flows and is the probability of loss due to exposure to the political, economic, and social upheavals in a foreign country. All business dealings involve risks. An increasing number of companies involving in external trade indicate huge business opportunities and promising markets. When business transactions occur across international borders, they bring additional risks compared to those in domestic transactions. These additional risks are called country risks which include risks Continue reading
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
Emergence of New Structural Designs of MNE’s
As companies grow in size, product lines, and dependence on foreign operations, complications of communication, responsibility and control become more complex. So, new structures continue to evolve to deal with this complexity. Proctor & Gamble (P&G) restructured its operations in 1999. P&G formed a unique concept of ‘Global business Product Units’ (GBUs) and 5 such units were established. With the 5 GBUs P&G wants to build its global brand equity as part of its ‘global strategic thinking’. At the same time 7 Market Development Organizations along the lines of major regions of the world were made to facilitate flexibility in the sphere of local actions. Thus it ‘thinks global, acts local’. There are numerous cases like this. But few general forms are alone dealt here. Network Organizations Network-based organization models have been characterized as reflecting an integrated worldwide strategy through globally distributed but interdependent resources and activities. The world is Continue reading
Understanding the Importance of International Business Strategy
The survival and progression of businesses in the 21st century is highly dependent on the ability of firms to expand beyond their national borders, taking into account the cost effectiveness of expansion and the complexity and risks associated with the company’s chosen international business strategy. The resources and objectives of a firm, as well as the demand for their product outside their national borders are important in taking the decision to globalize a company’s products and/or services. Although three strategies are more common, namely multi domestic, global and transnational approaches, the fourth strategy available to firms is the international approach to global expansion. This article will analyze the two approaches that differ in local responsiveness and cost pressure for the business, with the international approach as the least responsive and expensive for the company and the transnational approach as the most costly and locally focused from the four options available 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