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Globalization has affected all spheres of human existence. These effects are in areas ranging from regional economies to cultures and societies. It has integrated these aspects of human existence. The economical aspect is of relevance to this report therefore will be further discoursed. The impact of new generation, education, technology, inspiration, socio-economic changes, and globalization have redirected businesses from petty trading, hawking, local and intra-state businesses to a modern international level. The most intriguing factor being the power of the internet; the internet resized the world, making the world just about the same size as a piece of sand. Today, everybody from every part of the world is connected, making it easier for whatever is happening to any part of the world to impact the rest of the world. Take for instance, the freedom sought today in the Arab world, a part of the world known as huge producer of oil has impact in the price of fuel around the world.
Globalization as it relates to the economical integration can be perceived by taking a close look at the international and intranational trading which goes on day in day out in the world every second. With sophistication in technology, we live a fast life where businesses could be conducted between parties that are miles away from each other. This is as a result of the almost inexistence of trade barriers from country to country (there are different degree to which this is possible). Europe can be seen as a case study where the European Union has laid down rules as to how businesses are to be done within its member states. The exception of sanctioned countries like North Korea and recently Iran do not enjoy in the liberty of modern business or in a sense, do not enjoy the benefits of our globalised economy.
Now, the business environment is constantly changing but not all such changes are relevant to consider while starting up a venture or making adjustments to business objectives. Therefore, careful, data collection and understanding is required. Data collection is very important because drastic changes do not occur frequently in the business environment. Drastic changes are swift changes in the way things play out and such changes could affect the organization positively or negatively. Putting all this in order is the task of the entrepreneur and he/she does it by managing human resources amongst other things. Generally, firms are insured to guard them from these negative aspects of swift change in business environment.
The focus of this report is to evaluate the view that the current business environment encourages firms to take a more international view of Human Resource Management. This will be done by;
Discuss the different methods of doing business in recent times and relate them to how HRM is relevant to it.
Answer questions which are relevant topics in HRM like; strategies and structures adopted by multinational enterprises that are supported by HRM, the aspects of HRM that needs extra attention, what standards are required by multinational enterprises, how much local content they should absolve, maintaining loyalty to the head quarters, then look at the variation between countries as regards HRM and the challenges that are faced in harmonizing a multicultural work place.
Reverse effect of recent trend on some countries.
Edwin Flippo (1984) defines HRM as "planning, organizing, directing, controlling of procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organizational and social objectives are achieved". It directly affects all departments of the firm and can be done at all managerial levels. It provides directions as to how things are to be done in order for the organization to progress as it tries to reach its goals while following set standards. Haven had an overwhelming review, this report will now discourse the nitty-gritty of the topic as it affects HRM.
Methods of doing business
There are different ways by which businesses could be done. By business, I mean trading or movement of goods and services from point of production to where it is needed. Of course servicing needs comes with a cost which facilitates an exchange of a values commodity for another valued commodity. This process could be done electronically; in the case of ecommerce where mobile phones, emails and telephone are used and security is very paramount, import and export; which is mostly done for goods, face to face; where the buyer and seller meet in person to do the transaction (big firms usually send representatives to go and source for what their company need and their emphasis is on getting maximum value for money spent). This is of great importance to HRM because people are moving more and more in and out of countries, there is so much information available on the internet and people have relatives who know a lot. As a result of this, they are more aware of what services are obtainable elsewhere in the world and at what cost. How this relates to HRM is still not yet clear but will be in a short while.
The reality today is that people are more aware and doing business is not limited to a country. Therefore firms that aspire to be big, try not to limit themselves. This, they do by hiring the best hands for the job, motivating the work force to enable it reach its maximum productivity, inculcate training habit in the employee and providing them with the training they need. All these and more are the responsibility of the human resource manager. This means that he/she has to be well grounded in the world arena.
Answering questions to relevant HRM topics
Now we try to understand some of the topics that are relevant to this school of thought by reiterating why firms have to take a more international view on HRM.
Strategies supported by multinational companies: there is a variation with regards to the extent of global integration and local responsiveness. The more globally integrated the firm is, the lesser it is locally responsive to the needs of its local consumers. There are four strategies that are important to the multinational company; ethnocentric, regiocentric, polycentric and geocentric. Adopting all this strategy must be done in conjunction with human resource department. According to Lengnick-Hall and Lengnick-Hall (1990), the concept of achieving competitive advantage through HRM is based on the rationale that competitive advantage is the essence of competitive strategy.
Aspects of HRM in need of extra attention: bearing in mind that the aim of firms is to maximize productivity, they have to get the best out of the work force in the most efficient way. This must be done reasonably since we are dealing with humans and they have emotions (unlike money and materials). If managed well will be to the firms advantage else could be detrimental.
Standards required by multinational enterprises: here, international standards organizations requirement could be used as a guide while following host country's requirements when assigning tasks to employees.
Maintaining loyalty to the head quarters: to achieve set objectives, a branch of a firm needs to be loyal to the injunctions of the head office and it is the task of HR manager to make the employees see reason to and help them in their effort to do so.
Local content they should absolve: there is always a controversy here. Generally, firms have by laws which when applies sometimes, will not be tolerated by the host nation. For example, some countries stipulate the exact number of foreigners that are allowed to work and in some cases, are giving the time they should stay for the job. But the firm needs people that are capable of doing the job to be the ones to do it and may not be able to find locals who can fill in the position. It is now the responsibility of the human resource department to either send locals for training. Therefore, training is paramount. If it the job could be done elsewhere and imported then they have to resort to that. Which ever way, the company's interest comes first.
Variation between countries in HRM: what is obtainable in one country may not be in another. Some of the considerations are; personnel selection procedure, paid incentive (which is controversially accepted to be an effective way), training and development practices. For example, the United States is known to pay more on employee training compared to Japan according to a statistical finding.
Challenges faced in harmonizing a multicultural work place: this is very important as well because after a while the employees may start feeling not accepted (emotional break could render an employee dysfunctional) and could be handled by encouraging discussion among employees.
Reverse effect of recent trend on some countries
There are usually controversies as regards the following; what is obtainable, maintaining standards, making profit and so on. These generally constitute a bottleneck to activities of multinational institutions when they want to please everyone. But at the end of the day, self interests come first therefore such firms will for example, hire people from overseas to do the job as long as they are most suitable for it. This in the long run causes brain drain. Here, the best brains from a not so industrialized country go to other countries for greener pastures leaving their home country to the mercy of those who are not very capable.
Another effect is that, it makes the cost of labor increase therefore making it difficult for firm that want to get off the ground to be able to do so. Hence eliminating the required completion needed so that the prices of produce of such companies are not dictated by the companies.
To achieve equilibrium between employer and employee goals and needs, HRM departments focuses on these three general functions or activities: planning, implementation, and evaluation. The task that the human resource department takes on a daily bases are usually not applauded like those of the engineer who just developed a new way to improve a gadget or stock broker who was able to secured a big deal that is wroth thousands or millions of Euros. But any fault is usually traced back to it. Regardless of these, the human recourse department has to do its job and do it well been that consumers are more aware in recent business environment; firms are more compelled to review their HR and manage them to attain their short, medium and long term goals.