One response to the renewed complexity and opportunities has been the development of business
networks. These networks might be built around groups of independent firms or neighboring
firms in regional industrial clusters or districts (Best, 1990; Rugman, Cruz, & Verbecke, 1995). It
is argued that internal changes, such as more transparent internal transfer pricing arrangements or
service level agreements, have brought internal prices more in line with external prices, and have
allowed divisional managers to bypass weak or incompetent sections of the company and develop
supply or production arrangements that service these broader cross-business networks. In relation
to the question of whether firms should transfer HR systems globally, then the answer is yes, ifHR
system convergence is an antidote to incompetence.