What are the stages a firm typically goes through as it grows internationally and how does each stage affect the HR function?
In order to grow internationally a firm, need topass through several stages such as the nature or the size of their international activities grow. However this evolution may involve a long and tortuous process with many and diverse steps.
* Thefirst stage is the export
It’s the initial stage for manufacturing firms entering international operations. Most of time export tends to be handled by an intermediary. In this case the role of HRfunction is unclear. This stage is between HR manager and International sales manager. His principal mission is to select the export staff and train foreign agency staff.
* The second stage is salessubsidiary
Exporting is still controlled at corporate headquarters, but the firm must take a decision regarding the coordination of sales subsidiary, including staffing. Corporate executive can chooseto keep tight control of the department in selecting PCNs workers or they can focus on the knowledge of the foreign country market and the sensitivity to host-country needs. Indeed exporting isstill controlled by headquarters, HR is more involved at this step of the internalization, and he has to manage the issues of roles and responsibilities.
* The third stage is concerning theestablishment of a foreign production facility
It’s the short stage from the establishment of a sales subsidiary to a foreign production or service facility.However for some others firms, to invest directlyin a foreign country can be a large step. Indeed, to create its own foreign productions, to enter into a joint-venture with a local firm or to buy a local firm are some operations which require a lotof time. Some firms may use licensing and subcontracting in order to create this network of subsidiaries. But most firms, concerned about maintaining control, will place a local HR to control the...
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