The Effect of Globalization on HRM
People and Organizations: The Global Context for HRM, Lecture 8
Globalization means the processes
that reduce barriers among countries (Frenkel & Peetz, 1998). Globalization
is an important factor that influences organizations that compete for customers
with high expectations for performance, quality, and low cost (Morrison, 2005).
Consequently, the mobility between countries in order to firm performance has
focused on financial flow rather than labor force. At the same time, a new
managerial change such as the growth of foreigner’s stock ownership and establishment
of a subsidiary in host country effects on employer’s business strategy and
employment relations, including individual employees and trade unions
(Bonfenbrenner, 2000). Also, one of the most considerable point is labor costs when a firm go abroad for expansion in the market.
As organizations globalize,
cultural sensitivity and understanding are vital for HR managers to add value.
Globalization increases the mix of cultures, languages, perspectives, as well
as the number of expatriates. Effective HR managers must also develop business
knowledge, HR content expertise, influence skills, and personal credibility (Ulrich
et al. 1995). These skills and knowledge requirements become more salient in
global organizations. HR managers need to become more knowledgeable about the
legal environment.HR managers must comprehend several local business
practices, employment laws, and HR practices, communicate effectively across
nationalities, and gain the trust of individuals with a wide range of
backgrounds and even languages. As organizations expand globally, the number of
variables that must align for new organizational initiatives increases
exponentially, and that makes mastery of change management more challenging.
Increased internationalization also has pedagogical implications for educators,
especially for business programs that emphasize HRM. In addition to the
standard subject matter taught in higher education business programs, (DeCieri et al., 2005) suggested the realignment of HRM curriculum
to focus on cross-cultural management and flexible international organizations.
The increased demands placed upon HRM by globalization warrants increased
attention to these domains. In summary, the need to be competitive has driven
many organizations to expand internationally, presenting increased challenges
for human resource management. Ulrich’s multiple HRM role models help describe
the important implications of global trends and cultural implications for HR
managers who must continue to demonstrate and increase organizational value.
References
Frankel, Stephen, and David Peetz. “Globalization and Industrial
Relations in East Asia: A Three country Comparison” Industrial relations, Vol.
37, No. 3, July 1998.
Morrison, J. L. (2005). The global HR professional—Establishing an
ethically effective global network. Society for Human Resource Management White
Paper. Retrieved May 18, 2006,
Bronfenbrenner, K. (2000). UneasyTerrain: the Impact of Capital
Mobility on Workers, Wages, and Union Organizing, Commissioned Research Paper
for the US Trade Deficit Review Commission.
Ulrich, D., Brockbank, W., Yeung, A. K., & Lake, D. G. (1995).
Human resource competencies: An empirical assessment. Human Resource
Management, 34(4), 473–495.
DeCieri, H., Fenwick, M., & Hutchings, K. (2005). The challenge of
international human resource management: Balancing the duality of strategy and
practice. International Journal of Human Resource Management, 16(8), 584–598.
Good article Malintha .As you describe HR managers have to play a vital role in a globalized business environment.
ReplyDeleteThank you Nethra for your valuable comments
DeleteGood one Malintha. As you state cultural sensitivity and understanding holds a significant impact on HR managers to add value.
ReplyDeleteGood work Malintha, with the effect of the globalization the multinational companies wider their operations across countries, so HR policies need to expand when handing the cultural and legal barriers in the global context. Thanks for sharing.
ReplyDeleteAgree with you Malintha. HR manager with with better understanding on culture and legal barriers can take the organization to a higher performing level utilization of the human resources. Good one.
ReplyDeleteGood one Malintha. Globalization means the processes that reduce barriers among countries (Frenkel & Peetz, 1998).
ReplyDeleteSince globalization is all about thinking beyond the country borders, the results would impact globally. So it is needed to governed by laws & regulations at all the times. as you explained in the article thats the reason that HR manager should know about all the legal aspects.
ReplyDeleteGood flow having intersting flow. You explain that the labour costs when a firm go abroad for expansion in the market. Yes most of the European companies base their business in Asian countries for take that advantage. Thank you for sharing.
ReplyDeleteGood article. When a business expands its operation into other countries, the impact of globalization on human resource development and management is significant. Human Resources departments must adapt their thinking and practices to include cultural differences, foreign regulations and technological developments. Thanks for sharing.
ReplyDeleteModern HR professionals should consider to hire more skilled work force than ever since they need to cater the global market. This creates an opportunity for jobs and to identify personal skills. Good job.
ReplyDelete