Part-6(B): International Business Operations

Discussion Questions:

1.      Within 20 years, we will have seen the emergence of enormous global markets for standardized consumer products. Do you agree with this statement? Justify your answer.

It is true that within 20 years there will be enormous global markets for many products like Coke and Levis, but when it comes to standardized consumer products I have a doubt on it because while more global consumer markets are emerging, national distinctions for many products are increasing at an alarming rate.

The companies ascribing to global standardized products view the world as one entity, not a collection of national markets so that these companies compete on the bases of price, quality, reliability, and delivery of products that are identical in function and design. On the other hand, the companies ascribing to custom products view that products should be differentiated based on marketing mix such as price, product, distribution, promotion and others. In addition, like many product companies, Coke has used a mix of standardization and localized marketing for its products; for instance, the classic red and white colors remain the same globally while the flavor profile is slightly tweaked based on region of distribution.

To sum up, it is certainly true that there will have seen the emergence of enormous global markets not just for standardized consumer products but also for customized consumer products. However, having said this, within 20 years, there will be both standardization and localization depending up on the nature of products and demands of customers. Therefore, I partially agree with the given statement because more and more change is taking place for customized consumer products as per the need of each country’s individuals.

2.      What are the main advantages and disadvantages of the ethnocentric, polycentric, and geocentric approaches to staffing policy? When is each appropriate?

           

            A staffing policy refers to the selection of employees based on the skills they have to perform a particular job. There are three major types of staffing policy choices at the international level: ethnocentric, polycentric, and geocentric.            

            In an ethnocentric staffing policy, it is believed that employees from their home are better to select for key management positions so these positions are fulfilled by parent country nationals. The ethnocentric approach offers many advantages such as: overcoming lack of qualified managers in host country, cultural harmony, and helping transfer core competencies in host countries.  However, there are some disadvantages of this approach such as: Producing resentment in host country, and leading cultural myopia.  In addition, this approach is typically appropriate for firms pursuing an international strategy. 

            A polycentric staffing policy refers to a policy in which host country nationals to be recruited to manage subsidiaries, while parent country nations occupy key positions at corporate headquarters. The advantages of this approach are: eliminating cultural myopia and it is inexpensive to implement. The disadvantages of this approach are: Limiting career mobility and Isolating headquarters from foreign subsidiaries. This strategy is appropriate when firms are pursuing a multi-domestic strategy.

            In a geocentric staffing policy, the best people for key jobs throughout the organization, regardless of nationality, are recruited for performing a particular job. It is beneficial for the firms to utilize human resources efficiently and help building a strong culture and informal management network.  Its negative part is that immigration policies may limit implementation, and it is expensive to implement in comparison to other staffing policies. Therefore, a geocentric approach is typically appropriate for firms pursuing a global or transnational strategy.

3.      Case Study on “Lenovo”

The staffing policy that Lenovo is pursuing

Staffing policy refers to the selection of employees for particular jobs. It is basically done for two purposes. First, it is done for fulfilling the require jobs or skills needed to perform the given tasks. Second, it can be done to develop and promote the desire corporate culture of the firm. In the case, Lenovo is pursuing a geocentric approach for staffing that seeks the best people for key jobs throughout the company, regardless of nationality. For example, Lenovo made an effort to create a firm that was neither Chinese, nor American, but instead global in its orientation, a firm that is positioned to compete head-to-head with other players in the global PC market.

The company’s strategy and matching it with its staffing policy

After analyzing the case, it is known that the Company is pursuing a transnational strategy. Furthermore, the staffing policy matches its strategy. For example, when Lenovo is deciding who should hold management positions, the national origin of the candidate is not an issue. Rather, the decision focuses on whether the person has the skills and capabilities required for working in a global enterprise. In other words, Lenovo is committed to hiring the very best people, wherever they might come from. Lenovo seeks the best people for key jobs throughout the organization regardless of nationality; this enables the firm to match the best use of its human resources with its strategy.

The strengths of Lenovo’s staffing policy and potential weaknesses

It can be seen that Lenovo uses the same set of principles to guide workforce management in all locations; this in turn helps to maintain a unified corporate culture. In addition, if Lenovo’s employees are predisposed toward the organization's corporate norms and value system, the firm will be able to attain higher performance. On the other hand, Lenovo’s staffing policy is complicated by the profound differences between countries in labor markets, culture, legal systems, economic systems, and the like. The national immigration policies may limit its implementation and it could be more expensive policy as well.

The HRM function to enable Lenovo to become a truly a global enterprise

The HRM functions are essential to enable Lenovo to become a truly a global enterprise. For this, the company must make a culture that accepts workforce diversity and builds upon those differences. The major HRM functions such as job analysis and job description, recruitment and selection, workforce planning and development, motivation and performance appraisal, and compensation should be performed as per the world-class standard. In addition to these, the company should provide proper training and development for all employees so that they may gain a sense of achievement. Therefore, I believe that having these HRM functions performed appropriately with an aim of excelling better in each of the HR policies can truly enable the company to attain its competitive advantage. 

References

Hill, C. W. (2011). International Business: Competing In the Global Marketplace. New York: McGraw- Hill .

(n.d.) Retrieved October 29, 2015 from http://www.investopedia.com/articles/basics/11/biggest-risks-international-investing.asp

(n.d.) Retrieved 2015 November 1 from https://prezi.com/yyahpqva_1r6/lenovo/

(n.d.) Retrieved 2015, November 1 from http://www.ukessays.com/essays/management/history-and-timeline-of-lenevo-management-essay.php