Stages of Mnc
1. The modern organizations have two main approaches toward internationalization. Either the first born global where these organizations are international from their inception or the organization is rapidly internationalized due to demand for the unique product/service. The second is the stage approach to internationalization this focuses on stages that the organization moves through to reach multinational enterprise MNE status. The movements through stages are influenced by “strain from growth and geographical distance, decision that coordination and business units need more management and host-government restrictions related to ownership and equity.” (Dowling, Festing, & Engle, 2009) The stage approach begins with Export stage where increasing totals of exporting products/services creates the need to establish a presence in the international location. The Human Resources function becomes unclear, due to (marketing /developing export departments) manages the development of this international exporting arms staffing, and international intermediaries. The domestic headquarters “owns” the process, and continues exporting while building its market presence to enhance relationships and market experience in the new location’s business environment. Sales Subsidiary stage is the result of established strategic relationships in the international location the HR function of training and development prepares expatriates to manage the developing branches in the international locations. HR function is also actively staffing international locations in this stage. The Foreign production stage is where production is taking place in the new branches, which resemble the domestic location. The domestic HR function is staffing, however there are international branches developing their individual HR departments. The HRM in the international branches start to implement policy and procedures, which are appropriate for their locations. The staffing managed by both domestic and