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International Business Book

International Business Book

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Published by Waqas Abrar

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Published by: Waqas Abrar on Jan 11, 2012
Copyright:Attribution Non-commercial


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The need to integrate R&D and marketing to adequately
commercialize new technologies poses special problems
in the international business, since commercialization
may require different versions of a new product to be
produced for different countries.

While there is no one best model for allocating product
development responsibilities to various centers, one
solution adopted by many international businesses
involves establishing a global network of R&D centers.
Within this model, fundamental research is undertaken at
basic research centers around the globe. These centers
are normally located in regions or cities where valuable
scientific knowledge is being created and where there is


a pool of skilled research talent . These technologies are
picked up by R&D units attached to global product
divisions and are used to generate new products to serve
the global marketplace. At this level, emphasis is placed
on commercialization of the technology and design for
manufacturing. If further customization is needed so the
product appeals to the tastes and preferences of
consumers in individual markets, such redesign work
will be done by an R&D group based in a subsidiary in
that country or at a regional center that customizes
products for several countries in the region.


Chapter Eighteen

Global Human Resource Management


Human resource management refers to the activities an
organization carries out to use its human resource
effectively. These activities include determining the
firm's human resource strategy, staffing, performance
evaluation, management development, compensation,
and labor relations.

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 .

The Strategic Role of International HRM

We examined four strategies pursued by international
businesses--the multidomestic, the international, the
global, and the transnational. Multidomestic firms try to
create value by emphasizing local responsiveness;
international firms, by transferring core competencies
overseas; global firms, by realizing experience curve
and location economies; and transnational firms, by
doing all these things simultaneously. Success also
requires HRM policies to be congruent with the firm's
strategy and with its formal and informal structure and
controls. The opening case alluded to the relationship
between strategy, structure, and HRM. Through its


employee selection, management development,
performance appraisal, and compensation policies, the
HRM function can help develop these things.

Staffing Policy

Staffing policy is concerned with the selection of
employees for particular jobs. At one level, this involves
selecting individuals who have the skills required to do
particular jobs.

The need for integration is substantially lower in a
multidomestic firm. There is less performance ambiguity
and not the same need for cultural controls. In theory,
this means the HRM function can pay less attention to
building a unified corporate culture. In multidomestic
firms, the culture can be allowed to vary from national
operation to national operation.

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