Globalisation and Concept of International Human Resource Management (Essay Sample)

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Title: GLOBALISATION AND CONCEPT OF INTERNATIONAL HUMAN RESOURCE MANAGEMENT
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Introduction
The pressure that modern businesses face from globalisation has been said to be enormous now than it was two decades back (Lawler, 2003). This is because the world on a daily basis continues to reap real time advantages on the benefits of globalisation. Because of the pressure for modern businesses to go about their way of doing things from a globalised context, the roles and responsibilities of Human Resource (HR) departments, and for that matter Human Resource Management (HRM) has also been noted to have changed significantly (Noe et al., 2006). As HRM entails the functions of the organisation aimed at maximising employee performance, Poutsma, Ligthart and Veersma (2006) argues that it is only prudent that approaches to HRM will change to make employees better oriented for the new global market. In this paper, the real impact of globalisation on international human resource management are analysed from all facets of organisational management. These include political, social, technological, cultural, and economic perspectives. By so doing, it will be possible to appreciate the different ways in which organisations are responding to globalisation from the perspective of their HRM. The paper therefore makes it possible to critique existing approaches to HRM to know how well they fit into the dynamics of globalisation.
Conceptual frameworks relating to internationalisation and globalisation
Globalisation has been explained to be the advancement in the international integration of world view, products, ideas and components of culture that unifies the world as a common platform and marketplace (Fulcher, 2005). There are several conceptual frameworks that have come to highlight the core internationalisation processes that go into the creation of the concept of globalisation at the international business level. Two such conceptual frameworks are the Uppsala internationalisation model and eclectic paradigm. Uppsala international model is known to have its roots in behavioural theory of the firm and thus focuses on the processes that go into the growth of the international involvement of an enterprise (Evans, Pucik & Barsoux, 2002). As part of the behavioural theory which explains the Uppsala internationalisation model, companies using it go about internationalisation and for that matter globalisation from a systematic perspective. The systematic perspective aims gaining deeper understanding of any target international market before finally making destination on that market (Giles, 2000). The eclectic paradigm on the other hand focuses on the theory of internal maturation whereby national firms are thought to have the potential of being nurtured to transform into being multinational companies (Wild, Wild & Han, 2003). Robb (2004) argued that both Uppsala and eclectic are important for globalisation because they both lead to the conveyance of world view, products, ideas and components of culture to the enterprises in question.
Impact of globalisation on convergence in human resource management practice
The debate of whether or not globalisation has led or will lead to convergence in HRM practice continues to go on. This is because there are many who think that globalisation has come to centralise HRM practice, leading to a universal way of doing things. Below, four major forms of changes namely political, economic, social and technological changes, which have come about as a result of globalisation are discussed to verify if these changes have or will converge HRM practices.
Political change
According to Friedman (2004), globalisation has greatly affected the politicking dynamics within organisations and outside the organisations. This is because internal pressures continue to mount as employees and other internal stakeholders continue to fight for limited placement. Once this happens, there are two major effects which are positive and negative effects. The positive effects come in as employees seek self empowerment in order to be attracted by firms. The negative effects also come to play as internal wrangling and struggle for promotions lead to organisational conflicts (Haworth & Hughes, 2003). As this form of internal politics take place, HRM practice become affected and more converged towards the achievement of a common goal which is how well to attract and retain best talents. From an external political context, companies are now seen competing more feverishly with the utilisation of strategic positioning modalities that ensure that they gain competitive advantage (Guthridge, Asmus & Lawson, 2008). This external politics have made it almost a norm and common practice that such model as Porter’s generic options and Bowman’s clock be used by HR managers in positioning their companies well for the global competition. By extension, the political change have made HRM practice also the same and thus converged.
Economic change
The major economic change associated with globalisation has been said to be one which looks at profitability from the perspective of minimising waste or expenditure so that the hard earned revenues of the company can be retained (Weiss, 2005). Before the intensification of globalisation, most companies had fewer competitors and so demand often exceeded supply. Because of this, the companies had the luxury of exceeding their revenue targets due to the fact that they could increase prices as a response to the high demand (Kostova & Roth, 2002). Today the dynamics have changed as they are fewer demands than supply due to increased number of competitors coming on border as a result of globalisation. Because of this, the revenue levels of most companies have reduced, causing the need to slash spending heavily if they can avoid losses. Because of this economic change, such approaches to HRM as lean thinking which was thought to be the preserve of some few companies such as Toyota and Coca Cola has now been taken and practiced worldwide (Mosley, 2005). This is also a confirmation of how convergent HRM practice has become due to globalisation.
Social change
From a social perspective, the most significant form of change that can be pointed to is the one that has to do with the promotion of management-employee relationship. This is because Hamel and Prahalad (1994) observed a situation where the type of employee management that was taken from a bossy position where those below the ranks had no business contributing in decision making is now a thing of the past. Instead, employees are now appreciated as an integral part of organisational development, leading to the need for massive employee engagement. In the light of this, HR managers have responded by ensuring that they give their employees types of training and development that make them effective developmental partners when relating with those at the higher hierarchy. This situation has also impacted on HRM practices when it comes to issues such as organisational structure. This is because most HR managers have a feeling that the social environment of their workplace can now be managed best and easily if they have flatter structures as against the hierarchical structures which was commonly associated with local firms (Schramm, 2006).
Technological change
Making mention of globalisation without technology certainly makes the concept incomplete as technology is said to be the vehicle that has singly driven globalisation than any other phenomenon (Kim, 2002). Indeed through technology, most people and businesses have gained global penetration that they would never have had if they were to do everything physically instead of virtually. A typical example of technological change that can be associated with globalisation is electronic commerce (e-commerce). Through e-commerce, companies that operate from single offices now have global representation because it is possible for consumers across the globe to place orders for products, pay for them online, and have their products shipped to them in no time. Because of this change, there is now a common place where almost all companies converge to do business and that is the new media. As HR managers have to equip employees to maximise productivity, they have also been forced to make the use of information technology (IT) systems an integral part of their management. It is therefore not surprising that the need to have IT competence is now a major requirement in any job search.
International applicability of the concept of HRM
According to Hutchinson and Purcell (2003), when the scope of HRM is expanded for the larger global context, it constitutes international HRM. Meanwhile, while managing across national boundaries, there are key theories taken across social, political, legal, economic, and cultural perspectives that explain the international applicability of the concept of HRM. Some of these theories are discussed below.
Social context
It has been agreed that the social environment of the organisation is as relevant in affecting employee performance as all other aspects (Ulrich, 1996). In the light of this, while managing employees across national boundaries as a means of applying HRM in an international context, there are various social factors that are important to consider. In the estimation of Tung and Punnett (1993) there are two broad social contexts which can be identified in relation to HRM. These are internal and external social contexts. Whiles the internal social context relates to the kind of interpersonal relations that exists among employees in the delivery of their roles, the external social context looks at the relationship between employees and the lager society. In order to contextualise these two contexts under a single paradigm for HRM, ...