GHRM - TN 4 (3)i Cross Border Alliances and SMEs 2014-15

GHRM - TN 4 (3)i Cross Border Alliances and SMEs 2014-15 -...

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The context of cross- border alliances and SMEs IHRM Chapter 3
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We learn about: Global perspective on IHRM with external partners This chapter concentrate on Cross-border alliances, particularly on Equity-based alliances (e.g. M&As and International Joint Ventures). Because those are associated with complex IHRM processes and practices. Globalizing SMEs Chapter Objectives
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1. Exporting (to meet special foreign demands; US Steel’s special steels, Intel’s semiconductors) 2. Licensing (e.g. patents or technical know-how that is granted to the licensee for a specific time in return for a royalty; medicines) 3. Franchising (franchisee pay a fee based on the volume of sales; KFC & Mcdonald) 4. Sub contract Manufacturing (Outsourcing: Foxcon-Apple’s I Pad) 5. Joint Ventures (generally less than 50%; IBM-Lenovo) 6. Foreign Branching (City Bank’s branches) 7 . Equity Investment (Investment of enterprises in foreign countries by buying stocks; WaretBuffet’s BYD) 8 . Wholly Owned Subsidiary [FDI; Acquisition (BYD buy Korea SangYoug Motor) or Greenfield building (HyunDai Car built Beijing-HyunDai Motor)] 9 . Merger (German Benz Motor and America Chrysler Motor agree to operate as a company on the equal base; DaimlerChrysler car company)
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Equity-based alliances - Mergers and Acquisitions (M&As) (e.g. a merger case ; German Benz Motor and America Chrysler Motor agree to operate as a company on the equal base; DaimlerChrysler car company) (e.g. a acquisition case ; China BYD Motor buys SangYoug Motor in Korea) - International Joint Ventures (e.g. Lenovo & IMB)
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Non-equity alliance - Strategic alliance ( e.g. Sony-Ericson Mobile: Strategic alliance), - Licensing (e.g. patents or technical know-how that is granted to the licensee for a specific time in return for a royalty; medicines) - Franchising (franchisee pay a fee based on the volume of sales; KFC & Mcdonald) - Sub contract Manufacturing (Outsourcing: Foxconn- Apple I Pad)
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1. Introduction of cross-border alliance Non-equity alliance : an investment vehicle in which profits and other responsibilities are assigned to each party according to a contract. Each party cooperates as a separate legal entity and bears its own liabilities'. Examples include international technology alliance or strategic R&D alliances (e.g. Sony-Ericson Mobile: Strategic alliance), and management contracts (e.g. cooperative agreements in different functional areas such as marketing or production), Licensing, Franchising, and Sub-contract Manufacturing.
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Equity mode involves a foreign direct investors' purchase of shares of an enterprise in a country other than its own (e.g. mergers and acquisitions, joint ventures). This mode involves long-term collaborative strategies, which require the support of HR practices. The equity based alliance has more importance than non-equity based one.
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