Page 23 - DMGT548_GLOBAL_HRM

Global HRM

Notes Stage 3: An American company in the same line of business approached for a joint venture
arrangement with an array of new, but related products, all of which could be merchandised
through the same distribution channels. The offer was too good to be true.
Stage 4: The Company expanded its operations into several Pacific Rim nations while
consistently maintaining an above average rate of return.

Source: Rao, P.L. (2008). International Human Resource Management. First Edition. Excel Books. New
Delhi.

Notes A similar perspective has provided by Chandler (1962), who suggested the following
progression of firm’s growth:
1. Expansion of volume: Results in an increase in sales within the existing products.

2. Geographic expansion: Allows the firm to operate in distinct markets with existing
products.
3. Vertical integration: Through the absorption of suppliers of raw materials and/or
coming closer to end consumers through acquisition of retail outlets.
4. Product diversification: By developing new products or business, this may or may
not be related to the firm’s dominant business.

Self Assessment

Fill in the blanks:
6. In 2000, the International Monetary Fund (IMF) identified …………. basic aspects of
globalisation.
7. Convergence of lifestyles and tastes of people world wide acts as ………… forces for
globalisation.

8. Globalisation of markets refers to the ………… of national markets into one huge global
marketplace.
9. Technology has also been a ……….. driver of globalisation.

10. A ……………… is a state, country or territory where certain taxes are levied at a low rate
or not at all.

1.3 Variables that Moderate Differences between HRM and GHRM

The variables that moderate differences between HRM and GHRM are identified as:

 Complexity involved in operating in different countries, varied nationalities of employees
 The different Cultural Environment
 The industry or industries with which the MNC is involved

 Attitudes of Senior Management
 Extent of reliance of MNC on home country domestic market

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