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INTERNATIONAL

HUMAN

RESOURCEMANAGEMENT

1

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International Business what it is?

- Focuses on global resources

- global business opportunities and threats

- opportunities to buy or sell or exchange of goods and

services world-wide

- The first phase of globalisation started around 1870 and

ended 1919 (World war-l) driven by industrial revolution in

UK, USA and Germany. Imposition of trade barriersaffected the advanced countries most.

- The world nations felt need of cooperation in global trade

and balance of payment resulting into formation of IMF and

World Bank (International Bank for Reconstruction andDevelopment IBRD).

- Stage of recessio before World War ll made 23 countries

conduct post war negotiation to revive in 1947. Formed ITO

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- In 1995 GAAT was replaced by WTO.

- The efforts of IMF, World Bank and WTO to

liberalise the economies led to globalisation- The shift in the process has been:

International trade to International Marketing

to International Business

- International Business is locating plants andother manufacturing facilities in foreign/ host

countries. Also producing in one foreign country

and marketing in other foreign country.

-Beginning of LPG era. Various economiesincluding former communist and social countries

opened their economies to rest of globe.

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-Decline in trade barriers, decline in investment

barriers, increase in FDI, strides in technology

(microprocessor and tele- communication, internetand www, transportation technology etc) and

growth of MNCs propelled strides in global

business.

-A multinational company (MNC) is an organisation

doing business in more than one country. Trans

National Companies (TNCs) produce, market,

invest and operate across the world.-MNCs and TNCs are growing faster. India has six

MNCs among the top 500 MNCs.

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-In International Business it is important to

understand the potential of the geographical

market. International market present more

potential than domestic market as they are wide in

scope, varied customer taste, preferences

purchasing ability etc. Example: coca-cola, IBM,

Satyam computer etc. sell more in other countries

than home country.

-determining size of the customer who are willing

and able to buy require to be determined ccurately.

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Factors influencing Intl. Business:

a. Host country Monetary system

b. National Security Policy of the Host

countries

c. Cultural factorsd. Languages

e. Nationalism and Business Policy

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The variations in changing International

Business Scenario

It can be catagorised as under:Stage 1.-Domestic company- limits its operations tonational political boundaries.

Stage 2.-International company- focus on domesticpractices, but extend business to other countries too.

Stage 3.-Multinational company- formulate differentstrategies for different market.

Stage 4.-Global company- either produce in one countryand market globally or produce globally and market

globally.Stage 5.-Transnational company- produce, market, invest

and operate across the world.

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Characteristics of a Transnational Company:

1.Geocentric orientation

2.Scanning or Information acquisition

3.Vision and Aspirations

4.Geographic Scope

5.Operating Style

6.Adaptation

7.Extention

8.Creation through Extension9.Human Resource Management Policy

10.Purchasing

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Approaches in International Business:

Douglas Wind and Pelmutter advocated four

approaches to International Business :

1.Ethnocentric Approach- the domesticcompanies view foreign market as extension todomestic market.

2.Polycentric Approach- companies establishforeign subsidiary and empower theirexecutives.

3.Regiocentric Approach- subsidiaries considerregional environment for policy/strategy

formulation.4.Geocentric Approach- companies view entire

world as single country.