BMT 1017

INTERNATIONAL BUSINESS

DIGITAL ASSIGMENT: - 6

- SUBMITTED TO: DR. SATHISH A 

- SUBMITTED BY: ABHAY KUMAR

- REGISTRATION NO.: 20BBA0080

- DATE OF SUBMISSIONS: 26/10/2021

Explain the four (4) stages a firm typically goes through as it grows internationally and
state the human resource management activities needed at each stage with relevant
examples of your choice.

The four stages which a firm goes through as it grows internationally are-

Exporting Sales Subsidary

Subcontracting Foreign
Production

Exporting

Businesses that sell their goods and services to customers in other countries are exporting
them – they are producing them in one country and shipping them to another. Exporting is
one way that businesses can rapidly expand their potential market. Exporting companies are
often exposed to high levels of financial risk. Export is the mode for visible entry through the
direct marketing and sales process of locally produced goods and is usually managed by a
foreign agent or distributor.
Role of HRM

For example, if an exporting company wants to hire new employees, then human resource
manager will collect and verify the information like nationality, residency and location. They
also play a vital role to determine whether a position will require access to export-controlled
technology before a job description is posted and state any such requirement in the posting.

Subcontracting

Subcontracting refers to the practice of bringing in an outside company or individual to

perform specific parts of a contract or project. In most cases, a company subcontracts another
business to perform a task that cannot be handled internally.

More transactions are effective in areas where complex projects are common, such as
construction technology and information. Subcontractors are employed by the general
contractor of the project, who continues to be fully responsible for the completion and
execution of the project within the set boundaries and time frames. This could pose a risk for
contractors’ compliance.

Role of HRM

When an organization is subcontracting then it is HR management responsibility to deal with

the production and other issues that arise with the partner. HR managers are being asked to
select subcontracting solutions for businesses and lead organizations through vendor selection
and management of the outsourcing and subcontracting relationship.

HR outsourcing and subcontracting is a legal contract and agreement between an employer

and an external third-party provider where the employer transfers the management of, and
responsibility for, certain HR functions to the external provider.

Sales Subsidiary

A company that is owned by, and sells goods or services for, a larger company: The company
sells its products in 90 countries through 25 sales subsidiaries and 40 distributors.

It is a company owned
and controlled by
another company

Owning company is
Subsidary called as paent or
holding company

The system protects

assests of various
company from each
other's liabilities
The next step is the establishment of a sub-sales company to replace foreign agent or
distributor. International organizations may be asked to make a sale subsidiary in case a
company has problems with external agents, or they rely too much on international
operations, or if they want greater control or if they want to give more support to export
operations.

Role of HRM

HR help and support sales subsidiary success by first investing the time to understand a
company’s sales strategy and by understanding how various roles within the sales department
work together so the right kinds of talent are sourced and recruited. HR department provide
significant value by conducting a broad-based audit to evaluate whether or not the current
sales subsidiary force in the targeted company is optimally deployed.

HR disciplines to align talent with the go-to-market strategy, assess opportunities for
increased motivation, and identify barriers of productivity. It has a very relevant, hands-on,
data-driven role in contributing to sales subsidiary force effectiveness.

Foreign Production

Production is the core of any business organization having its operations on an international
scale. International business firms must look closely at production factors for profitability and
sustainability. Production refers to manufacturing, acquiring, and developing products for the
business market.

During the international division phase of foreign production, the construction of a separate
section and collection of international operations take place. International segregation is
similar to work and household chores organization. Assistant officials report to the head of
the international community. Outsourcing related to external activities may determine the
method of hiring key positions. When a subsidiary company has reached a larger size,
product / area of the world divisions can be established.

Role of HRM
Strategic or cross-cultural IHRM: managing HR practices within any organization from an
international perspective (e.g., consideration of global trends, talent etc)

Comparative IHRM: any organization seeking, describing, comparing and analyzing HRM
systems and practices in various countries (e.g., review of industrial relations or HRM
theories to assist in HR policy development)

Multinational enterprises (MNE) focus: management of HR activities for organizations that

have offices, and employees or representatives spread across two or more countries.