Teradyne: on the Road to China

1092 Words Feb 23rd, 2012 5 Pages
Teradyne, Inc. is an American company that sells automatic test equipment, along with service contracts to cover the downtime and repair of these complex products. Founded in 1960, Teradyne was the leader in automatic test equipment until 2006. The company is structured in four divisions, each one with its own management and internal structure: Broadland Test, Assembly Test, Semiconductor Test and Vehicle Diagnostic Solutions. Although Teradyne’s headquarters are located in Boston, its divisions are headquartered in Illinois and North Reading, in U.S.A., and Manchester in UK.
Over the years the importance of Asia in the electronics industry grew amazingly, especially China, which dominated the industry’s growth at greater than 20 percent
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Since service of these products was a derivate of the core business of selling ATD products, losses in the core business activity automatically resulted in service losses.

II. Where Do We Go Now?

The main problem in Teradyne is related with Strategic International Human Resources Management (SIHRM). It is easy to conclude that Teradyne had an Exportive SIHRM orientation – the general manager of the commercial business unit could make decision for all of his products internationally, and the Chinese operation was overseen by PCN’s only. Although this Exportive SIHRM could work between U.S.A. and Europe, it would never work in China, because the of the cultures distance between the two countries. Since the HR competence is context specific, and the Teradyne preferred a global strategy over a multidomestic strategy (Teradyne uses the resources acquired in China to create competitive advantage in other parts of the globe ), then the best SIHRM orientation would be the Integrative orientation. This shift in the SIHRM would lead to several changes in Teradyne’s activities in China:

- Considering the expanding available talent pool and the enormous cost of expatriates, Teradyne should cut the number of expats and hire more HCNs. Some Chinese’s and/or Taiwanese’s managers should be placed in decision taking positions, as long as they knew the local culture, talked both Mandarin and English, and had previous work
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