Page 19 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

Notes
As Molex grew rapidly overseas, the Human Resource Management (HRM) function made
sure that every new unit did the same basic things. Each new entity had to have an
employee manual with policies and practices in writing, new employee orientation
programs, salary administration with a consistent grading system, written job descriptions,
written promotion and grievance procedures, standard performance appraisal systems
that were written, and so on. Beyond these things, however, Molex views HRM as the
most localized of functions. Different legal systems, particularly with regard to employment
law, different compensation norms, different cultural attitudes to work, different norms
regarding vacation, and so on – all imply that policies and programs must be customized
to the conditions prevailing in a country. To make sure this occurs, Molex’s policy is to
hire experienced HRM professionals from other companies in the same country in which
it has operations. The idea is to hire people who know the language, have credibility,
know the law, and know how to recruit in that country.
Molex’s strategy for building a global company starts with its staffing policy for managers
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, favouring 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,
Contd...

14 LOVELY PROFESSIONAL UNIVERSITY