Running head: MOLEX CASE STUDY

Molex Case Study John Donnelly MGT/448 September 13, 2011 Pete Palacios

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Molex Case Study When a business is contemplating an international venture there are many items to be considered prior to the start of operations. Molex is a manufacturer of electrical connectors with its headquarters in Illinois began its first overseas venture in 1967 and has been a model for other companies ever since. In the drive to become a successful multinational corporation Molex would totally change its culture. One reason Molex has been successful is the role of the HR department in managing its human capital globally. Another reason is how the company plans for and manages the challenges of its global enterprise. However, initial attempts at international expansion were meager do in large part to cultural preferences. Molex has been in business for over 70 years servicing electronic component manufacturers all over the globe. Currently they are the second larger supplier of these products worldwide with revenues in excess of $3.3 billion (Molex, 2011). In order to gain the position in the market that they now hold Molex needed to expand internationally. This is precisely what they did beginning with their first international venture in Japan in 1967 and the second in Ireland in 1968. Since those beginnings Molex has grow to have over 50 production facilities located in 21 countries on five continents (Molex Incorporated, 2003). Molex has found that changing its corporate culture to embrace diverse national cultures and accept those cultural differences has made the company stronger and more successful. Molex actively recruits multilingual individuals both in the U. S. and overseas. They also recruit foreign college students in the U. S. These people they train in the U. S. where the employee becomes indoctrinated into the corporate culture and then they send them back to their home country to bring the ideas they learned in America to Molexs overseas operations. When recruiting outside of the U. S. Molex focuses on those people that have English as a second language. When

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visiting Molex headquarters it is not unusual to hear several different languages spoken, the company currently operates in 15 different languages (Hill, 2009). Molex uses a semi-decentralized HR system to manage its human capital globally. Local HR departments are responsible for maintaining local labor relations along with legal requirements. While functions such as performance reporting, salary administration, and grievance procedures are standardized across the company and managed by headquarters (Hill, 2009). Employees that are on semi-permanent and temporary assignments away from their home facility are partially managed from the home HR group. Molex has found that workers away from home that are in continual contact with that facility find it easier to integrate back into it when they return home. Molex extensively uses expatriated workers throughout their global operations. They find that the flow of ideas from one culture to the next helps with innovation throughout the organization. Although it is expensive to operate in this manner Molex believes that it is a small price to pay for the benefits the organization receives in return (Hill, 2009). When Molex first attempted to expand globally they found that it was not foreign government interference that was causing problems. Rather it was cultural preference. In Japan the electronic manufacturers were interested in Molexs products but the Japanese business culture at the time would prefer to purchase inferior products made locally than to purchase products from overseas. With guarantees that local market would welcome their products if made in Japan using Japanese style quality procedures Molex embarked on its first foreign venture (Molex Incorporated, 2003). Molex has not looked back since then.

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By embracing the differences of other cultures and societies Molex has expanded beyond anything that was imagined during that first overseas venture. Molex enjoys its current position in the market because of those differences not in spite of them.

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References Hill, C. W. (2009). International business. Competing in the global marketplace (7th ed.). Boston, MA: McGraw-Hill Molex. (2011). Timeline 70 years of innovation. Retrieved from http://www.molex.com/molex/about/aboutfile.jsp?filename=history.html&channel=Abou t+Us&chanName=&channelId=12&programId=72&progLink=History&chanLink=&pageTitle=History "Molex Incorporated." International Directory of Company Histories. 2003. Retrieved September 13, 2011 from Encyclopedia.com: http://www.encyclopedia.com/doc/1G22845800068.html .