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Molex, a 70-year-old manufacturer of electronic com-ponents based in Chicago, is rhe world's second-largestmanufacturer of electronic components. The companyestablished an internarional division to coordinateexporting in 1967 and opened its f irst overseas plantin Japan in 1970 and a second in l re land rn 1971.From that base, Molex has evolved inro a globalbusiness that generates about 61 percent of i ts$1.84 bil l ion in revenues ourside of the United States.The company operates some 50 manufacturing plants in21 countr ies and employs more than 16,000 peopleworldwide, with only one.third of them located in theUnited States. Molex's competit ive advantage is basedon a strategy that emphasizes a combination of lowcosts, excellent customer service, and the mass pro-duction of standardized products that are sold globally.Manufacturing sites are located in countries wherecost conditions are favorable and major customersare c lose. Since the 1970s, a key goal of Molex hasbeen to build a truly global company that is at homewherever in the world it operates and that proactivelyshares vaiuable knowledge across operat ions indifferent countries. The human resoLlrce managemenrfunction of Molex has always played a cenrral role inmeeting this goal.

As Molex grew rapidly overseas, the HRM functionmade sure that every new unir did the same basic things.Each new entity had to have an employee manual withpol ic ies and pract ices in wr i t ing, new employeeorientation programs, salary administration with aconsistent grading system, wr i t ten job descr ipt ions,written promotion and grievance procedures, standardperformance appraisal systems that were written down,and so on. Beyond these things, however, Molex viewsHRM as the most localized of functions, Different legalsystems, particularly with regard to employmenr law,different compensation norms, different cultural atti-tudes toward work, different norms regarding vacation,and so on all imply that policies and programs musr becustomized to the conditions prevail ing in a country.To make sure this occurs, Molex's policy is to hire ex-perienced HRM professionals from other companies inthe same country in rvhich it has operations. The ideais to hire peopie who know the language, have cre-dibil i ty, know the lar.v, and know how ro recruir inthat country.

Molex's strategy for building a global company startswith its staffing policy for managers and engineers. Thecompany frequently hires foreign narionals who are liv.ing in the United States, have jusr completed MBAs,and are willing to relocate if required. These individuals

will typically work in the United States for a while, be.coming familiar with the company's culture. Some ofthem will then be sent back to their home country towork there. Molex also carefully screens its Americanapplicants, favoring those who are fluent ln at least oneother language. Molex is unusual for a U.S. cornpany lnthis regard. However, with more than i5 languages spo-ken at its headquarters by native speakers, Molex is com-mitted to multilingual competency. The company alsohires a significant number of managers and engrneers arthe local level. Here, too, a willingness to relocate inrer-nationally and foreign language comperency are impor-tant, although this time English is the preferred foreignlanguage. In a sign of how multinational Molex's man-agement has become, it is not unusual to see foreign na-tionals holding senior positions at company headquarters.In addition to Americans, individr,rals of Greek, German,Austrian, Japanese, and British origin have ail sat on thecompany's executive committee, its top decision.makingbody.

To help build a global company, Molex moves peoplearound the world to give them experience in othercountries and to help them learn frorn each other.It has five categories of expatriates: ( 1 ) regular expatri-ates who live in a country other than their home coun-try for three- to five-year assignments (there areapproximately 50 of these at any one time), (2) "in-pats" r,vho come to the company's U.S. headquartersfrom other counrries, (3) thlrd'counrry nationals whomove from one Molex entity to another (e.g., Singaporeto Thiwan), (4) short-term transfers who go to anorherMolex entity for six to nlne months to work on aspecific project, and (5) medium-term transfers who goto another entity for 12 to 24 monrhs, again to work on^ ^^^^i{ ; ^ .^-^: ^^-4 JfrsLrrr l PruJtrLL.

Having a high level of inrracompany movernenr iscostly. For an employee making $75,000 in base salary,the total cost of an expatriate assignment can run ashigh as $250,000 when additional employee benefitsare added in, such as the provision of schooling anclhousing, adjustments for higher costs of l iving, adjust-ments for higher tax rates, and so on. Molex also insistson treating all expatriates the sarne, whatever theircountry of origin, so a Singapore expatriate l iving inTaiwan is l ikely to be l iving in the same aparumenrbuilding and sending his child ro the same school as anAmerican expatriate in Thiwan. This boosts the overallcosts, but Molex believes that lts extensive use of expa-triates pays dividends. it allows individuals to under-stand the challenges of doing business in differentcountries, it facilitates the sharing of useful knowledge

across different business entit ies, and it helps iay thefoundation fbr a common company culture that is globalin its outlook.

Molex also makes sure that expatriates know whythey are being sent to a foreign country, both in terms oftheir own career development and Molex's corporategoals. To prevent expatriates from becoming discon-nected from their home offlce, the HRM departmenttouches base with them on a regular basis through tele-phone, e-mail, and direct visits. The company also en-courages expatriates to make home office visits so thatthey do not become totally disconnected from their baseand feel like a stranger when they return. L,Jpon return,they are debriefed and their knowledge gained abroad isput to use by, for example, placing the expatriates onspecial task forces.

A final component of Molex's strategy for building acadre of globally minded managers is the company's in-house management development programs. These areopen to a wide range of managers who have worked atMolex for three years or more. Molex uses these pro-grams not just to educate its managers in finance, opera.tions, strategy, and the like, but also to bring togethermanagers from different countries to build a network ofindividuals who know each other and can work togetherin a cooperative fashion to solve business problems thattranscend borders.

Case Discussion 0uestions1. What multinational strategy is Molex pursuing:

localization, international, global standardization,or transnational?

2. How would you characterize the approach tostaffing used at Molex? Is this appropriate givenits strategy?

3. Molex is successful in its use of expatriate manag-ers. Why do you think this is the case? What canbe learned from Molex's approach?

4. How does the human resource managementfunction at Molex contribute to attaining itsmultinational strategy ?

Sources

1. J. Laabs, "Molex Makes Global HR Look Easy,"Workforce, March 1999, pp. 42-46.

2. C. M. Solomon, "Foreign Reiations," Workforce,November 2000, pp. 50-56.

3. C. M. Solomon, "Navigating Your Search for GlobalThlent," P er sonnel J ownal, May 1 995, pp. 94-1 00.

4. A. C. Poe, "'Weicome Back," HRMagaTine, March2000, pp. 94-105.

5. Molex SEC Form 10K, 2004.

Procter & Gamble (P&G), the large U.S. consumerproducts company, has a well-earned reputation as oneof the world's best marketers. P&G manufactures andmarkets more than 200 products that it sells in130 countries around the world. Along u'ith Unilever,P&G is a dominant global force in laundry detergents,cleaning products, personal care products, and pet foodproducts. P&G expanded abroad after World War II byexporting its products, brands, and marketing policiesto \Testern Europe, init ially with considerable success.Over the next 30 years, this policy of developing ne\\ 'products and marketing strategies in the United Statesand then transferring them to other countries becameentrenched. P&G's adaptation of marketing policies toaccommodate country differences was minimal. Ingeneral, products were developed in the United States,manufactured locally, and sold using a marketingmessage created in Cincinnati.

The first signs that this policy was no longer effectiveemerged in the 1970s, when P&G suffered a number ofmajor setbacks in Japan. By 1985, after 1 3 years in Japan,P&G was sti l l losing $40 mill ion a year there. It had

introduced disposable diapers in Japan and at one timehad commanded an B0 percent share of the market, butby the early 1980s it held a miserable B percent. ThreeIarge Japanese consumer products companies weredominating the market. P&G's diapers, developed in theUnited States, were too bulky for the tastes of Japaneseconsumers. Kao, a Japanese company, had developed aline of trim-fit diapers that appealed more to Japanesetastes. Kao lntroduced its product with a marketing blitzand was quickly rewarded with a 30 percent share of themarket. P&G realized it would have to modify its dia.pers if it were to compete in Japan. It did, and the com.pany now has a 30 percent share of the Japanese market.Plus, P&G's trim-fit diapers have become a best-seller inthe United States.

P&G had a similar experience in marketing educa-tion in the Japanese laundry detergent market. In theearly 1980s, P&G introduced its Cheer laundry deter-gent in Japan. Developed in the United States, Cheerwas promoted in Japan with the U.S. markering mes-sage-Cheer works in all temperatures and produces lotsof rich suds. But many Japanese consumers wash their