Current Business Environments Encouraging Change In Firms

Published:

The purpose of this study to analyze and asses that how current business practices contributes and encourages firms to take more international perspective of human resource management. The scope of this study is very wide and it covers all aspects of prevailing business environment that reflect the needs of internationalization of human resource management. The world has become a global village and business organization like MNC's have played a pivotal role in the process of globalization as defined by 'strong globalists' of whom Korten (1995) and Ohame (1990), "national and regional economies are becoming dominated by a new global system of economic co-ordination and control in which competition and strategic choices are organized at global level".

It's understood that all the business concerns of the world want to grow and at the same time they want to reduce the cost of products and services. And at the same time organizations want to capture more and more markets of the world in order to maximize their profits and cut off their cost. In order to achieve this objective companies develop their business setups in other countries where there are either big consumer markets or cheap workforce and raw materials. This requires dynamic human capital in order operate successfully in different markets. And at the points when companies move to diverse markets around the globe, the domestic human resource management failed to handle the issues of human capital because of different business environment and the factors that have influence and affect on that environment. This needs to manage human resources in international settings. At this stage international human resource management comes to solve all the issues related to human resources in international context and process of recruiting, training and effectively utilizing human resources in a multinational corporation is referred to "International Human Resource Management". Boxal (1995: 5) defines international human resource management as being 'concerned with the human resource problems of multinational firms in foreign subsidiaries (such as expatriate management) or, more broadly, with the unfolding HR issues are associated with the various stages of internationalization process'.

Lady using a tablet
Lady using a tablet

Professional

Essay Writers

Lady Using Tablet

Get your grade
or your money back

using our Essay Writing Service!

Essay Writing Service

Briscoe and Schuler (2004) states that 'the field of IHRM is about understanding, researching, applying and revising all human resource activities in their internal and external contexts as they impact the process of managing human resources in enterprises throughout the global environment to enhance the experience of multiple stakeholders, including investors, customers, employees, partners, suppliers, environment and society'. Sims (2002) defines IHRM as 'the process of procuring, allocating, and effectively utilizing human resources in a multinational corporation'.

The current business environment concentration provides a "macro" view of markets and institutions in the global economy. Since last decades there has been a tremendous increase in the number of organizations that have internationalized their operations. The expansion of business to international level also brought forward the international movement of labour as well and the issues is associated with the management of human resources across international borders are becoming increasingly important to international human resource managers. The globalization in the current business environment is the major factor affecting the businesses, HR strategies and policies and it fueling interest in international information systems, organizations structuring and the leadership development. In current business environment we see that more and more products and services compete on international level and more and more organizations operate outside their home country. This global expansion has strong impact on business functions and as business functions are handled through or by the people so there is a need of HR managers with sound knowledge, skills and experience in the international horizon which will help them to develop successful HR strategies and enable them to select and utilize their human resources effectively in order to compete on global basis.

Today the world has been changed significantly. Progress and continuous improvements in innovations has developed a structure of more interdependence among persons, societies and nations. This process of internationalization has derived people to develop a global mind set. This affected the thinking process of individual of the society because now individuals are more linked with international community due to flow of knowledge, technology advancement and media. Information technology has changed the shape of business transactions business are linked with the centre through control though internet or intranet. The communication process has become very quick and very cheap. Now we have access to all kind of information through a single click. This helped to make the decision making process quick and sound, now we are in better position to make a right decision than ever before because we have access to all information and data online. Now we have business set ups ion the west but it is controlled by the individuals who are in the east and it become possible only through technology. Like other functions of the business human resource management is also getting benefits from this advancement in technology. It has made it possible to perform human resource management functions, like procurement, maintenances, compensation etc, easier, quicker and effective. In the same way technology contributing in the functions of international human resource management and it make it easy the processes of recruitment, orientation, training and developments and compensation etc. As a result of this advancement the international borders have become insignificant. The business concerns play pivotal role in process of transformation of the business world. Today markets have become more global for products and services; investment across the borders is increasing; more and more joint ventures, acquisitions of firms; mergers and global alliances have been come into being. Lots of people are working outside their home countries as a result of this business globalization.

Lady using a tablet
Lady using a tablet

Comprehensive

Writing Services

Lady Using Tablet

Plagiarism-free
Always on Time

Marked to Standard

Order Now

In the current global business environment many changes and issues emerged in the process of establishing a business set up in global markets and to run it successfully across the borders. This issue includes multinational workforce, cultural diversity, host country laws, create effective communications systems among diverse employees, develop monitoring program, know the needs and requirements of diverse employees, asses the role of labour unions in the host country, know individuals and their culture, attitudes, values, traditions and norms.

Cultural theorist like Hofstede believes "cultural influences play an enormous in the way employees behave in organizations and that the introduction of technology produces only superficial similarities". (Hofstede, 1991: 17). Formulate international human resource strategies in order to develop organization culture and human resources simultaneously in international context in order to create a relationship among diverse individuals to work for common objective and accomplishments of tasks individually and collectively. Cox (1991) stated that 'a multitude of useful ideas can be generated out of workforce diversity'. These are all the issues that are being faced by firms in the arena of international business.

It's the people who make and break the organization. Its understood that human resource is the greatest asset of the organization and the achievement of the corporation success can only be accomplished by or through the people. And at this stage domestics HRM becomes disable to address all afore mentioned issues. International business environment, at this point, demands an international view of human resource management that can address all these issues effectively and efficiently. This demand tells us that why international human resource management has become so vital and important in current business environment. The international human resource management helps us to develop a framework useful for establishing a workforce that has the capacity to handle cultural diversity and overcome the strategic issues faced by the organization while operating. It helps the organization to run its operations smoothly. "The organization's style, values, traditions, and leadership are critical encouragements to the cooperation and commitment of its members. These can be viewed as intangible resources which are common ingredients of the whole range of a corporation's organizational routines". (Gant, 1991: 122). It meets the challenges of cross-cultural dissimilarities. It's the international human resource management that manages the expatriates, that provides policies, procedures and guidelines about the recruitment process and training and development in an internationally competing environment.

It is concluded that International human resource professional are responsible for the relocation of employees and orientation and induction of employees from different nationalities and help them to familiar and adapt new culture and environment. The international human resource management deals through more functions, different and changing perspectives, requires more intermingling with employees and involvement of their personal life. This aspect of international human resource management is influenced by more external environment forces and it usually attached by more risks as compare to domestic human resource management. International human resource managers deals with issues like offshore relocation, host country taxation systems, induction and orientation, provide administrative services to expatriates; are responsible for recruitment, training and development, and performance appraisal of international and domestic employees and deals with host country laws and manage the relation with host country government, cross-culture variation in reward structure and international corporate social responsibility. The international human resource management enables an organization to employ and manage people who can lead from the front, posses the ability to act and think at global level. For this purpose, the human resource professional require first right global mind and global skills in order to operate smoothly in current business environment. International human resource professional must have the ability to employ the concept and principle of emotional intelligence and it should emphasis on the importance of self awareness in order to deal with diverse people and it should make it clear that people's value and organizations objective intersect to common goal and that is to develop good employment relationship.