The Global Integration of Business Functions

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The world has continuously changed for improvements and innovations. The earth is not huge enough to limit human interactions. People are shifting from a world in which national economies were isolated from each other by barriers and cultures to cross border trade and investments. Nowadays, people around the world are more connected to each other than ever before. The revolution of sciences and technologies has gradually improved human livings. It is much easier for people to travel, communicate and do business internationally. As a result, demand for expanding economy to countries urges the foundation of globalization. Integrating into the global economy offers multinational companies not only opportunities to disperse their industries for goods and services worldwide, but also challenges to compete with others and sustain in flexible environment. On the other hand, globalization has caused much pressures for multinational business. Two major concerns of many international business corporations are what “pattern of integrating modes” fits their business activities and how these intergrating modes can be effectively applied in each “business function” to obtain efficient performance (327).

Based on theory and nature of global integration, K. Kim and his co-workers developed four specific integrating modes, including “people, information, formalization and centralization”, which significantly contribute to managing and operating organizational units and lead to success of multinational corporation (329). Although these integrating modes have obviously distinct characteristics, they can be either individually or collectively applied into core business functions which vary from objectives and goals of each corporation. First, “people-based integration” is a way of transferring human resource from headquarters to subsidiaries . Those key members who understand requirements or specifications of work and possess knowledge will be responsible for training and...
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