Globalization and Its impact on Human Resource Management

What is Globalization?  

Globalization is “a process by which the people of the world are united into a single society. This process is a combination of Economic, technological, Socio Cultural, and political forces. However, from the point of view of business with which we are concerned here, globalization should be taken on the basis of economic and technological forces only though organizations opting for global business have to take care of socio-cultural and political forces of the countries concerned while implementing their strategies. From this point of view, degree of globalization is measured on the following features:

• Goods and Services: exports and imports as a proportion of national income.

• Human resource: inward/outward migration flows in relation to total national population.

• Capital: inward/outward direct investment as a proportion of national income.

• Technology: international research and development flows, proportion of population using particular inventions particularly factor-neutral advances such as cell phones, internet, etc. While globalization is increasing in terms of its degree, there is a controversy about the level of globalization achieved.

 According to Greengard (1995) defined globalization as the system of interaction among the countries of the world in order to develop the global economy.

According to Arthur (1994) see globalization in the tendency of businesses, technologies or philosophies to spread throughout the world, or the process of making this happen.

Factors driving Globalization

The last two decades have seen the evolution of the global manufacturing environment, majority of the manufacturers have global presence through exports, strategic alliances, joint ventures or as a part of a committed strategy to sell and produce in foreign markets.

(a) Global Market forces
There is tremendous growth potential in the global markets which resulted in intensified foreign competition in local markets which forces the small-and-medium-sized companies to upgrade their operations and even consider expanding internationally.

(b) Technological Forces
Product diversity has increased as products have grown more complex and differentiated and product life cycles have shortened. These have been diffusion of technological knowledge and global low-cost manufacturing locations have emerged. In response to this diffusion of technological capability, multinational firms need to improve their ability to tap multiple sources of technology located in various countries.

(c) Global Cost Forces
New competitive priorities in manufacturing industries, that is product and process conformance quality, delivery reliability and speed, customization and responsiveness to customers, have forced companies to reprioritize the cost factors that drive their global operations strategies. A number of high technology industries have experienced dramatic growth in the capital intensity of production facilities.

(d) Political and Macroeconomic Forces
Getting hit with unexpected or unreasonable currency devaluations in the foreign countries in which
they operate is a nightmare for global operations managers. Managing exposure to changes in normal and real exchange rates is a task which the global operations manager must master.

Advantages of Globalization

• Globalization Broadens Access to Goods and Services

• Globalization Can Lift People Out of Poverty

• Globalization Increases Cultural Awareness

• Information and Technology Spread More Easily With Globalization

Disadvantages of Globalization

• Workers Can Lose Jobs to Countries With Low-Cost Labor

• Globalization Hasn’t Protected Labor, Environmental or Human Rights

• Globalization Can Contribute to Cultural Homogeneity

• Globalization Empowers Multinational Corporations

Globalization of Human Resources Management

Human resource management consists of two areas :

• Staff management
• Developmental tasks

         Global human resources management and training for the management of strategic and operational staff contradictions, as well as for those who have the ability to manage a variety of cultures, provide an organized format. The development and management of global enterprise, the development of management staff in the world think they can and action, those who are equally memorable, global skills, are global. The process of globalization requires increasing the role of the intellectual tools to change human resources management in the public sector. (Hamidi, sarfarazi, 2011, p20).

         Opportunity or threat of globalization to be greatly to the capabilities and capacities of different groups and cultures, countries and different groups in making efficient programs, policies, and depends on behavior.(Kiani, 2001, p97).

         The role of the human resources unit according to the changes you mentioned should be changed. Human resources as in the past, mechanical factors were considered, but in the last twenty years the importance of a good work force, flexible, and subtly evoked. more advanced human resources units may be just the employee, Department of education and development programs designed to increase the diversity of creativity in monitoring market. but professional managers need to reload Human resources and reshaping with the operational managers have a partnership and committed to them (barghi, peydayi, 2008, p16).

         Human resource managers must change in order to change the operating role and reform processes and improve the organizational capacity of the play. (kheirandish, afsharnjad, 2003, p15).

Impact on Globalization on Human Resource Management

• Impact on pattern of Employment: Globalization has changed pattern of employment considerably by forcing business organizations to organize their business around their core competence to face competitive threats effectively. In the globalization era, the primary means of developing competitive advantage at the market place is no longer the physical and financial resources but the human resources.

• Impact on Human Resource Development: Globalization paves the way for rapid technological development and assimilation. With the result, any new technology is made available to various users necessitating new skills in human resources. So that human resource is capable of working in the changing work environment which is resulted by globalization.

• Impact on Employee Expectations: Globalization has serious socio-cultural implications. It raises the expectations of people of a country in the form of international demonstration effect. Because of international demonstration effect, expectations of employees increase significantly. These expectations are not only in the form of increased monetary compensation but are also in the form of the treatment that should be given to them.

• Impact on Work practices: Globalization brings contemporary management practices in organization including those relevant for work practices. Many newer concepts have been adopted by Indian organizations in managing their human resource because of globalization. Some of the concepts are employee empowerment, work-life balance, alternate work schedule options etc.

Comparison of Domestic and International HRM

             The international HRM practices have to be different from those of domestic HRM. This difference exists on six dimensions as shown in the following table :

      

               According to today's turbulent world, that it is the era of globalization have coined numerous challenges that organizations are exposed to one of the most important of them, the challenge of human resources. Human resources managers to succeed in the arena of globalization requires the adoption of a new approach towards the issues and stories are human resources managers to solve these issues and should seek new ways of the world leaders must be directors. Pushing limitations and threats to have the opportunity to be able to staff for being superior and not just survival, but also speed up innovations develop.

Globalization in Hospitality and how it impact on employee attrition
              Hospitality organizations which are increasingly operating internationally create real challenges for their employees and managers to interact and effectively work with people from different cultural environments due to the globalization. Globalization is increasingly resulting in cultural diversity of the hospitality workforce. Many cultures have to work together and communicate during daily duties. This cooperation and communication is critical in the hospitality business where customers are served by many employees, who in turn have to be supported by other staff underline that to serve guests and resolve their problems, contact employees are usually required to communicate with staff from other areas. If cooperation between departments fails due to cultural differences and communication misunderstandings – contact employees may not be able to function effectively, especially when service failures occur and an immediate recovery action is needed. This “moment of truth” may negatively influence customers’ service experience, leading to guests’ dissatisfaction and even their decision to leave.
 
               Well-managed human resources are the key to company effectiveness and competitive advantage. In the hospitality industry, which is labor-intensive, human resource management is more complex [Casado 2001, p. 29] and strongly depends on effective communication [Wolvin 1994, p. 195]. However, lack of understanding of cultural differences may lead to many communication misunderstandings and ineffective practices in managing, motivating and rewarding culturally diverse employees [Lee and Chon 2000, p. 126], which in turn may result in employees’ job dissatisfaction and frustration. When employees’ frustration grows, turnover may increase and product and service quality suffer [LeBlanc et al 1995].
              
                 Summing up, in light of a growing number and intensity of intercultural interactions, well-developed intercultural competence is very important to function effectively with people from different cultures [Seymour and Constanti 2002, p. 3]. This means an ability to see and understand differences between one’s own and other persons’ cultures and countries, accepting them and reacting accordingly in both conversation and behavior [Luka et al. 2013, p. 3]. Culturally competent individuals should have a great mixture of attitudes, knowledge and skills that support them to establish good relations and communicate effectively with representatives of different cultures.

                 With increased competitiveness on globalizations, HR managers in many organizations are experiencing greater pressure from top management to improve recruitment, selection, training, and retention of good employees and in the long run would encourage employees to stay in organizations. HR managers should examine the sources of employee attrition and recommend the best approach to fill the gap of the source, so that they can be in a position to retain employees in their organization to enhance their competitiveness in this world of globalization. HR managers must understand that employees in their organizations must be treated as the most liquid assets of the organization which would make the organization to withstand the waves of globalization. This asset needs to be monitored with due care, otherwise their organizations would cease to exist. Employees should be given challenging work and all managers should be hired on the basis of knowhow by following laid down procedures of the organization and this would make organization to have competent managers at all levels of management and hence good supervision. Griffeth et al. (2000) noted pay and pay-related variables have a great effect on employee turnover. Management must compensate employees adequately. They should pay employees based on their performance and in addition they should give employees incentives like individual bonus, lump sum bonus, sharing of profits and other benefits. Hence, if these are put in place they would minimize employee attrition.


References

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