Page 242 - DMGT545_INTERNATIONAL_BUSINESS

Unit 12: Basics of International HRM

Molex’s strategy for building a global company starts with its staffing policy for managers notes
and engineers. The company frequently hires foreign nationals who are living in the United
States, have just completed MBAs, and are willing to relocate if required. These individuals
will typically work in the United States for a while, becoming familiar with the company’s
culture. Some of them will then be sent to their home country to work there. Molex also
carefully screens its American applicants, favoring those who are fluent in at least one
other language. Molex is unusual for a U.S. company in this regard. However, with more
than 15 languages spoken at its headquarters by native speakers, Molex is committed to
multilingual competency. There is also significant hiring of managers and engineers at the
local level.
Here, too, a willingness to relocate internationally and foreign language competency are
important, although this time English is the preferred foreign language. In a sign of how
multinational Molex’s management has become, it is not unusual to see foreign nationals
holding senior positions at company headquarters. In addition to Americans, individuals
of Greek, German, Austrian, Japanese, and British origin have all sat on the company’s
executive committee, its top decision-making body.
To help build a global company, Molex moves people around the world to give them
experience in other countries and to help them learn from each other. It has five categories
of expatriates: (1) regular expatriates who live in a country other than their home country
for three-to-five-year assignments (there are approximately 50 of these at anyone time),
(2) “inpats” who come to the company’s U.S. headquarters from other countries, (3) third-
country nationals who move from one Molex entity to another (for example, Singapore to
Taiwan), (4) short-term transfers who go to another Molex entity for 6 to 9 months to work
on a specific project, and (5) medium terms who go to another entity for 12 to 24 months,
again to work on a specific project.
A high level of intracompany movement is costly. For an employee making $75,000 in
base salary, the total cost of an expatriate assignment can run as high as $250,000 when
additional employee benefits are added, such as the provision of schooling and housing,
adjustments for higher costs of living, adjustments for higher tax rates, and so on. Molex also
insists on treating all expatriates the same, whatever their country of origin, so a Singapore
expatriate living in Taiwan is likely to be living in the same apartment building and
sending his child to the same school as an American expatriate in Taiwan. This boosts the
overall costs, but Molex believes that its extensive use of expatriates pays back dividends.
It allows individuals to understand the challenges of doing business in-different countries,
it facilitates the sharing of useful knowledge across different business entities, and it helps
to lay the foundation for a common company culture that is global in its outlook.

Molex also makes sure that expatriates know why they are being sent to a foreign country,
both in terms of their own career development and Molex’s corporate goals. To prevent
expatriates from becoming disconnected from their home office, the HRM department
touches base with them on a regular basis through telephone, e-mail, and direct visits.
The company also encourages expatriates to make home office visits so that they do not
become totally disconnected from their base and feel like a stranger when they return.
Upon return, they are debriefed and their knowledge gained abroad is put to use by, for
example, placing the expatriates on special task forces.
A final component of Molex’s strategy for building a cadre of globally minded managers
is the company’s in-house management development programs. These are open to a wide
range of managers who have worked at Molex for three years or more. Molex uses these
programs not just to educate its managers in finance, operations, strategy, and the like, but
also to bring together managers from different countries to build a network of individuals
who know each other and can work together in a cooperative fashion to solve business
problems that transcend borders.
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