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The success of global firms is hinged upon creating sustainable competitive advantages in their overseas operations. A strategic human resource (HR) function that is both adaptive and standardized is critical for better subsidiary management and stronger international presence. Going global requires greater integration of HR practices and policies into the corporate strategy. This paper summarizes the main points of three articles focusing on international business, gives the writer’s respective position and rationale, and provides employer best practices in the specific areas examined.
The authors make three critical points on international small and medium enterprise (SME) responses to host countries’ cultural and socioeconomic contexts. First, SMEs respond to the local culture through adaptation – submission and indifference – or standardization (superiority and disputable standardization) (Apetrei, Kureshi, & Horodnic, 2015). Tradeoffs between the two strategies allow a firm to respond to local tastes and preferences without compromising corporate culture and global practices. Second, the article notes that three factors determine the extent to which an SME standardizes or adapts its management practices to host country context. They include the owner’s overseas business experience, individual values, and industry in which the firm operates (Apetrei et al., 2015). Third, pressures from customer relations and economic or political blocs force global firms to embrace standardization practices in specific sectors, such as IT.
I agree with the authors’ findings that a standardization-adaptation balance is critical to international success for two reasons. First, although a company may pursue a particular strategy, i.e., either standardization or adaptation, responsiveness to the subsidiary’s needs is required because customer needs and preferences are heterogeneous. Second, from the international human resource management (HRM) perspective, an ethnocentric approach reduces responsiveness to the host culture’s needs, while a polycentric orientation limits parent company control of the subsidiary. Employing best practices in this area involves an integrative orientation in which skilled third-country nationals are recruited to take overseas positions.
In this article, the author examines the concept of experimental international business (IB) and its theoretical underpinnings. He makes several arguments for IB research and teaching. First, lab studies do not lack external validity, which is a common assumption amongst scholars. Empirical research shows significant correlations between the lab and out-of-lab findings (Van Witteloostuijn, 2015). Second, external validity is unrealistic, and therefore, optional in IB research. It should develop from a chain of internally valid studies that use triangulation designs. Third, because randomization is impractical in field investigations, IB experiments can only be done in a lab environment. Such economic studies must observe two principles: “a ban on deception and a need for incentive compatibility” (Van Witteloostuijn, 2015, p. 532). Fourth, lab studies could use quasi-experimental designs that include randomization and surveys to enhance the generalizability of the findings. Finally, IB research should consider cross-cultural contexts and individual factors known to impact business-related behavior.
I agree with the author’s assertion that including different cultural contexts and personal perspectives would improve the external validity of IB research. Recruiting a representative sample bearing the range of characteristics of the target population – international companies or executives – could increase the generalizability of the results. However, I differ with him on the argument that external validity is not necessary for IB studies. Rigor in research helps make results externally valid for use in practice. Best practices in IB research include randomization and mixed-method designs to obtain findings that can be generalized into broader international business contexts.
The author analyzes corruption in IB, its causes, and its effects. Four major points emerge from the analysis presented in this article. First, public and private forms of corruption in IB stem from the giving and receiving of bribes by executives and government officials. Therefore, they can be controlled through laws targeting the two actions (Cuervo-Cazurra, 2016). Second, the measurement of corrupt practices should involve appropriate survey questions, dimensions, and cross-cultural perceptions. Third, cross-border corruption has adverse consequences on country development and international business profitability (Cuervo-Cazurra, 2016). Fourth, unethical practices are inconsistent with the premises of agency theory, transaction cost economics, resource-based view, resource dependence, and neo-institutional perspective. Corruption in IB contexts can be used to extend these theoretical frameworks.
I concur with the author’s arguments and sentiments. The analysis shows that incentives for improving foreign direct investment (FDI) flows into a country can create an environment that favors unethical practices. Bribery to receive improper advantages may stifle competition, resulting in reduced profitability of the industry. Legislations against unethical conduct would promote good corporate governance and inspire investor confidence in the country. I also agree with the statement that existing theoretical perspectives can be enriched by studying international corruption. The cross-cultural differences in perception of fraud mean that these theories may not apply to all contexts. Best practices in anti-corruption efforts include fines, such as those imposed on Wal-Mart (Mexican subsidiary) in 2012, for giving bribes to government officials.
As firms expand their operations to international markets, strategic HR policies and practices must be responsive to local cultural contexts and retain critical elements of the parent company’s organizational culture. The three articles reviewed show that standardization-adaptation balance, external validity in IB, and fraud are the implementation and research issues in internationalization efforts. These factors can foster or impede the formulation and implementation of a successful global HR strategy.
Apetrei, A., Kureshi, N. I., & Horodnic, I. A. (2015). When culture shapes international business. Journal of Business Research, 68, 1519-1521. Web.
Cuervo-Cazurra, A. (2016). Corruption in international business. Journal of World Business, 51, 35-49. Web.
Van Witteloostuijn, A. (2015). Toward experimental international business: Unraveling fundamental causal linkages. Cross Cultural Management, 22(4), 530-544. Web.