ABSTRACT
The old approach to doing business outside of the United States involved companies viewing their international activities as a “step-child” with lower importance, which was secondary to domestic U.S. activities. Such companies could be compared to the colonial empires of the past in which the so-called “mother country,” aka home country, was given highest priority and the “colonies” (host countries) were of importance only to the extent that they strengthened the mother country. Most top managers were from the home country, which is known as an
ethnocentric approach
to human resources. Such companies were sometimes referred to as “international” as long
as they were involved in any aspect of international business such as exporting or importing while primarily producing goods and services in the United States, and sometimes they would be referred to as “multinational” if they had production or operations in more than one country. Multinational enterprises still tended to be primarily American, Japanese, German, etc., and their operations outside their home-based country might play a vital role for their overall world goals, but each country’s operation was viewed
as distinct, regardless of the amount of autonomy or home-based domination of the subsidiary in that country. Today, when people refer to a “multinational” enterprise they are usually using the term as synonymous with “global business.”
