INTERNATIONAL HUMAN RESOURCE MANAGEMENT 1

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 barriers affected 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 and Development IBRD). - Stage of recessio before World War ll made 23 countries conduct post war negotiation to revive in 1947. Formed ITO

- 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 and other manufacturing facilities in foreign/ host countries. Also producing in one foreign country and marketing in other foreign country. -Beginning of LPG era. Various economies including former communist and social countries opened their economies to rest of globe.

-Decline in trade barriers, decline in investment barriers, increase in FDI, strides in technology (microprocessor and tele- communication, internet and 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.

-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.

Factors influencing Intl. Business: a. Host country Monetary system b. National Security Policy of the Host countries c. Cultural factors d. Languages e. Nationalism and Business Policy

The variations in changing International Business Scenario It can be catagorised as under: Stage 1.-Domestic company- limits its operations to national political boundaries. Stage 2.-International company- focus on domestic practices, but extend business to other countries too. Stage 3.-Multinational company- formulate different strategies for different market. Stage 4.-Global company- either produce in one country and market globally or produce globally and market globally. Stage 5.-Transnational company- produce, market, invest and operate across the world.

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 Extension 9.Human Resource Management Policy 10.Purchasing

Approaches in International Business: Douglas Wind and Pelmutter advocated four approaches to International Business : 1.Ethnocentric Approach- the domestic companies view foreign market as extension to domestic market. 2.Polycentric Approach- companies establish foreign subsidiary and empower their executives. 3.Regiocentric Approach- subsidiaries consider regional environment for policy/strategy formulation. 4.Geocentric Approach- companies view entire world as single country.