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Human Resource Management (HRM)

•          Set of activities directed at attracting, developing, and maintaining the effective workforce necessary to achieve a firm’s objective

•          Differences in culture, levels of economic development, and legal systems among countries may force changes in HRM systems

The International Human Resource Management Process

Culture Shock

Psychological phenomenon that may lead to feelings of fear, helplessness, irritability, and disorientation

Phases in Acculturation

·         Honeymoon phase

·         Disillusionment phase

·         Adaptation phase

·         Biculturalism

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Financial Issues in International Trade

•          Which currency to use for the transaction

•          When and how to check credit

•          Which form of payment to use

•          How to arrange financing

Method of Payment

•          Payment in advance

•          Open account

•          Documentary collection

•          Letters of credit

•          Credit cards

•          Countertrade

Using a Letter of Credit

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International Operations Management

•       Operations Management: the set of activities an organization uses to transform different kinds of inputs into final goods and services

•       International Operations Management: the transformation-related activities of an international firm

The International Operations Management Process

Managing Quality in International Business

•          Quality: totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs

–        American Society for Quality Control

•          ISO 9000: 2000

–        International set of quality guidelines

–        Basis for quality certification

–        International Organization for Standardization

The Essential Components of Total Quality Management

Total Quality Management

•       TQM: Integrated effort to systematically and continuously improve the quality of an organization’s products and/or services

•       Statistical process control: family of mathematically based tools for monitoring and controlling quality

•       Benchmarking: process of legally and ethically studying how other firms do something in a high-quality way and then either imitating or improving on their methods

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International Marketing

Process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individuals and organizational objectives

International Marketing as an Integrated Functional Area

Marketing Mix

•       How to develop the firm’s product(s)

•       How to price those products

•       How to sell those products

•       How to distribute those products to the firm’s customers

The Elements of the Marketing Mix for International Firms

Key Decision-Making Factors

•       Standardization versus customization

•       Legal forces

•       Economic factors

•       Changing exchange rates

•       Target customers

•       Cultural influences

•       Competition

Standardization versus Customization

•       Should the firm adopt an ethnocentric approach?

•       Should it adopt a polycentric approach?

•       Should it adopt a geocentric approach?

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Benefits of Strategic Alliances

Scope of Strategic Alliances

•       Significant variation

–      Comprehensive alliance

–      Narrowly defined alliance

•       Degree of collaboration depends upon basic goals of each partner

The Scope of Strategic Alliances

Types of Alliances

•       Comprehensive

•       Functional

–      Production

–      Marketing

–      Financial

–      Research and Development

Pitfalls of Strategic Alliances

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Strategies for Analyzing and Entering Foreign Markets

Foreign Market Analysis

•          Assess alternative markets

•          Evaluate the respective costs, benefits, and risks of entering each

•          Select those that hold the most potential for entry or expansion

Factors in Assessing New Market Opportunities

•          Product-market dimensions

•          Major product-market differences

•          Structural characteristics of the national product market

•          Competitor analysis

•          Potential target markets

•          Relevant trends

•          Explanation of change

•          Success factors

•          Strategic options

Choosing a Mode of Entry

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International Strategic Management 

Comprehensive and on going management planning process aimed at formulating and implementing strategies that enable a firm to compete effectively internationally

Fundamental Questions

•          What products and/or services does the firm intend to sell?

•          Where and how will it make those products or services?

•          Where and how will it sell them?

•          Where and how will it acquire the necessary resources?

•          How does it expect to outperform its competitors?

Factors Affecting International Strategic Management

•          Language

•          Culture

•          Politics

•          Economy

•          Governmental interference

•          Labor

•          Labor relations

•          Financing

•          Market research

•          Advertising

•          Money

•          Transportation/ communication

•          Control

•          Contracts

Sources of Competitive Advantage for International Businesses

•          Global efficiencies

•          Multinational flexibility

•          Worldwide learning

Strategic Alternatives

•          Home replication strategy

•          Multidomestic strategy

•          Global strategy

•          Transnational strategy

Components of Int’l Strategy

•          Distinctive competence

•          Scope of operations

•          Resource deployment

•          Synergy

Levels of International Strategy

•          Corporate Strategy

•          Business Strategy

•          Functional Strategy