Globalization And Impact On Hr Practices In Bangladesh Commerce Essay

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In this report of HR practices in Bangladesh we will explore the impact of practices in different dimension. Globalization brings diversity and innovative way of working in Bangladesh. Basically the era of globalization practices of HR from recruitment to industrial conflicts are brought by Multinational organization by sending expertise or recruiting host country expertise.

MNE'S HR practices in Bangladesh has an impact as difference between headquarters and host country's in aspect of culture, education ,demographic which has considerable impact on global practices. It is unlikely standard practices will be successful regardless of geographic region.

In this report we try to find the issues and sub-issues cause problem in HR practices and proposed the solutions to overcome the barriers.

Background of organization

Our chosen organization is southeast bank, Bangladesh.

Southeast Bank Limited is a scheduled commercial bank in the private sector established under the ambit of Bank Company Act, 1991 and incorporated as a Public Limited Company under Companies Act, 1994 on March 12, 1995. The Bank started commercial banking operations on May 25, 1995. During this short span of time the Bank is successful in positioning itself as a progressive and dynamic financial institution in the country. The bank had been widely acclaimed by the business community, from small entrepreneurs to large traders and industrial conglomerates, including the top-rated corporate borrowers for its forward looking business outlook and innovative financial solutions. Thus within this very short period of time it has been able to create an image and earn significant reputation in the country's banking sector as a Bank with Vision.

Southeast Bank Limited has been licensed by the Government of Bangladesh as a Scheduled commercial bank in the private sector in pursuance of the policy of liberalization of banking and financial services and facilities in Bangladesh. In view of the above, the Bank within a period of 12 years of its operation achieved a remarkable success and met up capital adequacy requirement of Bangladesh Bank. It has been growing fast as one of the leaders of the new generation banks in the private sector in respect of business and profitability as it is evident from the financial statements for the last 12 years.

The Bank has now 33 Branches spread over the country. The Bank plans to open a good number of Branches in the near future covering important geographical locations of the country catering to the growing clientele needs of trade, commerce and industry. With the passage of time the activities of the Bank has expanded significantly giving rise to complexities of operations, thus, requiring formulation of uniform operational procedures covering all updated` rules, regulations and practices of General Banking.

Southeast Bank Limited-one of the fast growing second generation private sector Banks came into being in 1995 with a view to stand out as a pioneer banking institution in the country and contribute significantly to the national economy. The Bank started commercial banking operations with an initial authorized capital of Tk.500.00 million and paid up capital of Tk.100.00 million. The Authorized capital of the Bank stands Tk.3500.00 million and the Equity Fund (Capital and Reserve) stands Tk.4940.92 million which includes paid up capital of Tk.2112.74 million and Reserve Fund of Tk. 2828.18 million as on December 31, 2006.

The Bank has been successfully completing its twelfth year of operations having enjoyed the complete confidence of the depositors and achieving significant growth in the entire areas of banking operations. The Bank has a deposit base of Tk. 46, 056.18 million and loan portfolio of Tk. 41,147.28 million in the year 2006, which posted a growth of 16.93% and 20.89% respectively. During the year 2006 the Bank has earned operating profit of 2062.66 million, which is, 28.57% higher compared to the previous year. The Bank always fulfills the provisioning requirements as set by Bangladesh Bank reflecting sound financial health and discipline.

The Bank is presently operating with 33 branches including 5 Islamic banking branches and 3 rural banking branches, plans to expand more new branches in the near future in important business hubs including rural growth-centers with solution-driven high quality banking and financial services to contribute towards expansion of trade and commerce/industry and agriculture for balanced growth and economic prosperity of the country. The consistent and increasing growth trend of the above mentioned performance indicators has increased depositors' confidence as well as goodwill/reputation of the Bank to a great extent and these have contributed to increase the shareholders' value.

The Bank focuses on building high-quality human resources with expertise and professional skills adopting the Human Resources Re-engineering and Development Plans with a view to creating an excellent clientele service environment for ultimate achievement of sustained profit growth making no comprises with the quality asset creation. The Bank's Human Resource Development strategy is to build up quality manpower with conceptual/ managerial knowledge, skills through designing/ arranging of continuous in-house and outside training programs.

The Bank focuses on customer-friendly marketing approaches by offering various deposit schemes with products diversification and market segmentation ensuring efficient delivery of personalized banking services at the clients door steps and caters to the ever-growing financing needs of clientele at a competitive price The Bank introduced "On-Line Any Branch Banking" to facilitate customers to draw/deposit money & do businesses from any of the Branches irrespective of locations.

The Bank has been successful in operations of business as a financial intermediary and generated highest per Branch profit with a significantly high level of employee productivity. The company philosophy to workout best solutions for customers' financing needs have positioned the Bank as being perceived by the customers and clients as a business and customer friendly Bank.

Vision of Southeast Bank Limited:

To stand out as a pioneer banking institution in Bangladesh and contribute significantly to the national economy.

Mission of Southeast Bank Limited:

High quality financial services with the help of the latest technology.

Fast and accurate customer service.

Balanced growth strategy.

High standard business ethics.

Steady return on shareholders' equity.

Innovative banking at a competitive price.

Attract and retain quality human resource.

Firm commitment to the society and the growth of national economy.

Southeast Bank Limited's Core Values:






Insight and Spirit

Enthusiasm for Work

Business Ethics

Southeast Bank Limited's Core Strengths:

Transparent and swift decision making

Professional team of performers

Satisfied clients

Internal control

Experienced risk administration


Southeast Bank Limited's Commitments to Clients:

Southeast Bank Limited is a customer friendly banking institution thriving fast in both earning and ability to stand out as a leading banking institution in Bangladesh. The Bank delivers unparalleled financial services with the touch of our heart to Retail, Small and Medium Scale Enterprises (SMEs), Corporate, Institutional, Governmental and individual clients through the outlets of branches across the Country. Bank's business initiatives center on the emerging needs of the clients. Bank's commitments to the clients are the following:

Provide service with high degree of professionalism and use of most modern banking technology.

Create life-long relationship based on mutual trust and respect.

Respond to customer needs with speed and accuracy.

Share their values and beliefs.

Grow as the Bank's customers grow.

Offer first-rated solutions of clients' banking problems and issues.

Provide products and services at competitive pricing.

Ensure safety and security of customer's valuables in trust.

Corporate Information of Southeast Bank Limited:

Table 1:- Corporate Information of SEBL.

Name of the company

Southeast Bank Limited

Legal Form

Southeast Bank incorporated in Bangladesh as a Public Limited Co. under Co's Act, 1994 on March 12, 1995 and listed in Dhaka Stock Exchange and Chittagong Stock Exchange.

Date of commencement

March 12, 1995

Registered Office

1, Dilkusha Commercial Area  (3rd Floor),

Dhaka - 1000, Bangladesh.


9550081, 9567571-2, 9563101




632463 SBL PB BJ




[email protected], [email protected]

Web page


Howladar, Yunus & Company (A)


Lee, Khan & Partners, The Law Syndicate.

3. Objectives of the research:

Human resources management was termed people management in early days where human are being treated as resources like machineries but the HR brings the concepts human is sustainable capital.

The objective of the research has cover definite part of human resource development. These are as follows

1, Recruitment: there is significant vast difference between MNE's from western country's and host country recruitment process.

2. Employee relation: we will explore individualism VS collectivism, employee performance appraisal, employee participation, motivation, commitment and trust and so on.

3. Industrial relation: we will discover the involvement of trade union, employer association, Joint consultative committees (JCC'S), and government policy in industrial relation and also the impact of trade union law and union density rate and there correlation approaches.

Globalization of HR and its practices in context of Bangladesh we find those issues above has predominant impact on global HR practices.

Literature review:

Hofstede cultural frame work is widely accepted across the global arena of HR practices.

Parent expertise in host country:

First expertise from parent country will expect cultural sock in host country in term of security concern, time management, attitude to woman transport, local language, excessive bureaucratic. Culture shock leads expertise hostile approaches towards HCN'S. Cultural shock creates stress and lowers the productivity and moral of employee. In US, number of employees claim compensation due to work related stress [1] . Its expertise job to diffuse practices from parent country to host country it could be difficult because HCN'S also find it difficult in terms of different cultural of parent.

Solution: Most importantly to overcome culture shock is coping with uncertainty but crucial for critical to success depends on is faster adaption. Person has the experience more likely perform well in host country rather inexperience EXPERTISE. Company need gives security to the employee's family and fringe benefit such as children education, free housing, car, furniture etc. To get best output from Expertise Company need to make them feel live in home country. Language training is necessary to understand the local language to communicate effectively. Expertise failure causes for personal adjustment problem in terms of social, cultural, economic and political and that can solve by better selection, training and mentoring the expertise.

US based carbon county board of commissioner chairman O'Gurek said that why they form union they do not need to tell us whether for social or economical reason we always been fair especially in this economic situation [2] it's become difficulty for the MNE'S to lobby against the union. So there is ongoing fight between capitalist and socialist. It's become difficulty for the MNE'S to lobby against the union. So there is ongoing fight between capitalist and socialist.

Cross -culture management:

Martin (2002) said culture is largely unmanageable at the organizational level [3] . MNE's issues cross-cultural difference between nation and differences between national values and attitude. Schneider and Barsoux (1997) identified that problem exists in all society; different group will solve them in different ways. Corporate culture of parent is very difficult diffuse in the home country because values, behavior and attitude of people are significantly different. Interpret employee social and cultural values are sources of employee and management conflict. Labors demand and supply trends in the host country and their skills, industrial and technological advancement. And also section methods affect the parent recruitment policy at host country issue such as shortage of skills, favor etc. Maryann (2002) pointed that Monolithic organization is still viable which is isolating organization from pressure of change. Monolithic defender is usually preventing organization to adapt with diversity and make cultural integration.

DU GUY et al found that issue also arise in different countries workforce knowledge, discourse, power and identity [4] . French and Italy practice ER IN their organization in power Terms but in Britain is opposite.

Universal approach of best practice of US based parent (high performance practice) ignore the societal aspect of host country because countries are differed as flexible adaption in Italy, diverse quality production in Germany sociotechnical in Sweden. It's difficult for parent diffuse parent country practice in host country due to cultural diversity.

Change senior management due the retirement brings changes in the leadership style which crates problem for employees to adjust with these changes. Gender obstacles are seen as main problem in many countries. Corporate language and subsidiary language could be different and that can creates problem in communication because translation takes time. Dowling and denice identifies language could be the barriers for the communication between PCN and HCN. They focus on language standardization, dual language practice at work place Language; country like Germany prefer German rather English. Jin (1998) [5] found that most Chinese, in English they are weaker conversational than written.

Solution: MNE'S need to reduce the local culture barriers by exporting parent culture and communicate with people the benefit of the standardization of practice. Reduce the level of interaction in cultural aspect and understand the local and practices hybrid culture for the commitment employees to achieves business goals. In terms of convergent or divergent approach parent have bring synergy. Boxel and Purcell (2003) identified for the sustainability of MNE'S developing innovative strategy and practice these to country to country. [6] Parent have able cope with changes in structure, procedure and employee relation practice of specific country socio-cultural aspect. MNE'S concern should be on organizational effectiveness or well-being of the employee rather strike focus o the cultural differences and adjacent. Hofstadter's framework of culture widely used to identifies difference between national cultures.

Power distance: Country with low power distance reflects more flat and democratic management structure, on the other side high power distance where centralization of authority, autocratic leadership basically based on power culture. MNE'S with high power culture or lower power culture need to adapt with subsidiary power culture or convergence necessary for the success of the company. Manager from higher power distance to lower power distance country need to understand the management style because communication flow different from his/her home country.

Example if Britain going operates it' subsidiary company in France, Singapore and other high power distance culture. In this aspect parent need to considered adapt with subsidiary power culture and convergent the HR practices in a balance approach.

Uncertainty avoidance: Low uncertainty avoidance by parent practices into high uncertainty avoidance subsidiary is very difficult to achieve. Manager in Britain have greater autonomy than German, so German expertise work in UK need to consider in mind.

Individualism: United States and China stand opposite each other's. US are individualistic and china more likely collectivist society [7] . So, MNE'S have adjusted the rewards and performance management and mode of building relationship whether short-term or long term depends on the practice of particular society.

Masculinity: Masculine society value money and achievement and do extra work to reach the target where feminine society are opposite they less concern about monetary rewards other than holiday and spent time with family.

Labor Market: demand and supply trends of labor in the host country.

HR implication: labor market is varying from region to region country to country even city to city in terms of skills, ethnic background, industrial and technological advancement, level economic growth, education, vocational training etc. develop economy demand higher knowledge and technology based work host country. So subsidiary company underdeveloped countries are less able to the demand of PCN'S. Legislation also affects the recruitment and selection process of parent in Host-country. Recruitment and selection process is quite challenging in particular countries because of shortage of skills, negotiation. Company using E-recruiting will tough to diffuse in host-cost poor infrastructure.

Solution: host countries company shortage of knowledge could outsource from TCN'S.

WOK-LIFE BALANCE: work-life balance differs from country to country.

HR implication: Work life balance is important issue for business operating international. Long working hour can creates workload among the employee, negative impact on their social and also negative impact on employees health. In result this will affect the job performance of the employees. Employment law varies from country to country where in the UK average weekly working hour is 48 but its longer working hour in Japan, US, and Australia.

CIPD believes that employer should protect employee from continuously working long hour as it impact on the company overall productivity. [8] 

Most of the writers give opinion to adapt with national culture they focuses on relationship with people, human nature, time language etc. Better understanding of these is vital to the business success.

But Hofstede work does not take consideration cultural complexity and ignore the country's sub-culture. Although it's important for MNE's to use his framework to identify the cultural issues affect their convergent approach to Host country.

Hall and Hall (1990) considered communication in high context culture more focus on indirect (Japan, China) communication where low cultural (Britain, Australia) context are more direct communication.

Ethical issue:

HR implication: Adams (1965) suggests that individual evaluate their relationship between their input and output at work. If they found that working very hard and little reward motivation will be dropped automatically. Ethics perception are culturally different, Buelens said it is about accept difference rather mutual understanding [9] . In host country Child labor, longer working hour and working in below standard level those of developed parent countries.

Employee involvement and participation: Salaonm [10] suggests that involvement build commitment and participation involve employee take part in decision making process. Participation gives collective power employee increasing their role in decision making rather get information to be committed in involvement. Organization decision about work condition such as improving quality and efficiency management sometimes do not encourage employee participation. Participation build employee commitment and increase performance, employee should have the power and influence on decision making process. Once decision has been made and there is no reflection employee voice could be less encouraging for them to act on it.

Power of the both parent and host countries determine the convergent or divergent HR practices. Powerful HR purely adapted takes convergent practices to host country where diffusion rate is high and vice-versa. In the aspect of shortage skilled labor issue MNE'S can outsource according country specific rules and regulation. Training and development programmed tries to implement by parent need to be culturally adapted to meet local circumstances.

Host-country government policy: Government influences the MNE'S policy in numbers of different ways by introducing employee relations legislation [11] .

Government is concern to protect citizen right in equal pay, equal opportunities for both man and women, disable worker, minority worker. Some countries government recognized the trade union. Government is concern about economic policy of the country where companies are bound to obey the legislation. Government policy evolves over a time-whether takes part of voluntaries or interventionist approach depends on the political party and their relationship with union. In US Government has little interference on business and company has the opportunity to do best for sustainability without any external influence. But recent economical crisis change the scenario. On other side in European Government is major employer and greater influence on businesses.

Solution: government with good relation with TU can be influenced through lobbying by MNE's FDI is a national interest.