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PROPOSED TOPIC AREA
Strategic challenges posed by globalisation, with the importance of Human Resource Management in meeting globalisation challenges faced by organisations and the role of HRM in coping with such challenges, with a focus on Barclays Bank, UK.
PROPOSED WORKING TITLE
Role of HRM in meeting strategic challenges posed by globalisation: Case study of Barclays Bank, UK.
PROPOSED RESEARCH AIMS
The overall objective of this study is 'to examine the theory of HRM and the role of HRM in meeting globalisation challenges'. This has been broken into following sub-objectives:
- To analyse the effects of globalisation on Barclays and what ways does globalisation affect Barclays Bank
- To evaluate the benefits and downsides as well as the challenges and risks globalisation imposed on Barclays
- To ascertain Barclay's global strategy
- To discover the strengths and weaknesses of Barclay's HR policies under globalisation and in the current conditions of the UK economy
- To identify whether Human Resource Management facilitates globalisation.
Human Resource Managers and the activities of Human Resource Managers have often appeared to be random and with least consideration to organisation's strategy (Azmi 2008). However, recent developments have provided HR managers the opportunity to move from their stereotype role to becoming strategic partners. The role of Human Resource Management in organisations has changed from measuring individual productivity of employees towards strategic human resource management to focusing on knowledge management, human learning management, competence management and learning organisation (Berardine 1997, Hagan 1996, Nordhaug 1993). Increasing globalisation not only entails tougher competition and more dynamic markets but also proposes the possibility for increasing the competence potential through employing competence from different geographical locations in the global workforce (Borghoff and Pareschi 1998)
An accurate definition of globalisation is elusive but it is broadly recognised that the world is increasingly being interconnected in terms of its economic, political and cultural life. Individuals, groups, organisations and societies remain discrete and separated and the task is not only to design information systems that facilitate increased connectivity but also to support this integral diversity (Richard et al. 2000). Globalisation is linked with the increasing flexibility of goods, services, commodities, information, people, and communications across national boundaries (Arnold and Sikka, 2001). The growth of globalisation is most obvious in banking and finance sector where, with the help of information technology, global stock markets, futures, debt, derivatives and interest rate interchanges have enhanced the geographical flexibility of capital, money and credit supply (Harvey and Lash). Progressively, globalisation denotes to processes by which dealings and judgements in one part of the world can have major concerns for individuals and societies in distant parts of the world. For example, Closure of banks.
Since the nineteenth century, banks have been important to all industrialist countries for the financing of production (Daniele et al.1999). The Banking industry worldwide is being restructured. The global forces for this change in Banking industry comprise technological innovation, deregulation of financial services at the national level and opening up to the international competition and changes in corporate behaviour (Hawkins and Mihaljek, 2001).Moreover, recent banking crisis in Asia and Latin America have highlighted these forces.
Recently, the globalisation of competition has become an essential factor for all the industries (Robert and Dorothy, 2003). To compete effectively in the home country or globally, organisations should regularly organise their activities on a worldwide basis. Although many global firms have an explicit global business strategy, rare have a consistent strategy for managing information technology internationally. Many organisations have information exchange protocols across their multinational organisational structures but rare have global information architectures. A global information management strategy is necessary because of 1) industry globalisation - the increasing globalisation trend in many organisations and the associated support on information technologies for coordination and operation and 2) national competitive posture - the combination of separate domestic strategies in individual countries that may struggle with coordination.
LITERATURE REVIEW ON GLOBALISATION
According to Giovanni Reyes (2001), Globalisation is a theory that represents the current measures in the international area in terms of development, economic and social conditions, political and cultural influences. Globalisation emphasises the two key increasing trends: 1) active communication systems globally and 2) smooth economic conditions with high flexibility of financial trade and resources. With increasing globalisation, the assumption made that more countries are depending on worldwide conditions in relation to communication, trade and international financial system, and hence the world situation is more organised in international economic connections (Sunkel: 1995, Carlsson: 1995, Scholte: 1995). How these "integrational aspects" effects and influences the nations can be analysed by two major perspective viz. 1) systematic approach i.e. countries' external level and 2) sub systematic approach i.e. countries internal conditions. The units of analysis for sub systematic approach could be economic growth or social indicators. According to Mortimore, M. (1992), there are two key issues in international political economy, which are taking place under current worldwide economic condition with respect to globalisation process, are: 1) the structure of the international economic system and 2) how this structure has improved. These issues of globalisation can be covered by using the theory of globalisation from the development perspective. As per the globalisation approach, the roles of the countries international division of trade and labour are vital in understanding a wide range of social, political and economic changes within particular countries and the structure of the global system. The simple statement according to Smith and White, (1992), is that international connections, roles and relationship are the significant variables when examining the international economic structure. These variables help explaining various measurement of economic development. E.g. trade, financial links and communication among countries.
The key assumption of globalisation is that a growing amount of integration among the world plays a vital character in about all type of economic and social changes. Nevertheless, there is very less agreement on the fundamental organising principles of globalisation. According to Klein, Pauly and Voisin (1985), neoclassical economic theories are built on comparative advantage, international relations methods that stress geopolitics (Keohane 1993 and Thompson 1991), and world system perspectives that highlight "unequal exchange" (Amin 1989, Frank 1979, Wallerstein 1991) propose contradictory models of the international system. According to Schott (1986), there are four main areas under argument referring globalisation theory are linked to four key features 1) the element that countries can have more than three stages of location : Core, semi periphery and periphery countries, 2)the positional characteristic of the countries in terms of sharing the equal arrangement of relationships can be associated to the "clique" characteristics with other countries at a local level (Snyder 1989), 3) Even in the periphery position, the structures of the countries might have a lot of differences in terms of their size of economies, internal effective demand, export structure and level of historical and current economic growth (Smith 1992) and 4) there is a strong suggestion that the arrangements of economic awareness among countries particularly in the field of international trade and financial systems are correlated to the dependant development patterns affirmed by the neostructuralist authors (Cardoso 1992).
LITERATURE REVIEW ON GLOBAL STRATEGY
In the era of globalisation, managers, researchers and consultant have realised that the study of industries, strategies and organisations in a global context needs to be regarded as the norm. It has been argued that the success or the failure of the business in the twenty first century will depend on whether it can compete effectively in the world markets (Hax 1989, Ohmae 1989). Global strategy can be defined as the way a business competes in the global market and plays a vital role in determining the performance of a business in a global market. According to Levitt (1983), advances in communication and transportation technologies and increase in worldwide travel have homogenised world market. The strategic imperative for businesses competing globally is to achieve the economies of scale from the global market. Thus, multinational corporations, which treat individual country markets separately, are likely to disappear and be replaced by global corporations, which sell standardised products in all the countries in the same way. A major source of competitive advantage has become the ability to produce high quality products at the lowest cost since the global consumers will sacrifice their preferences for the high quality and but low priced products. Levitt (1983) argues that, the optimum global strategy is to produce a single standardised product and sell it through a standardised marketing programme. Hout et al. (1982) disagree, however arguing that an effective global strategy requires not a single approach but many different approaches. These include exploiting economies of scale through global volume, taking a pre-emptive position through quick and large capital investments. According to them, the global strategic imperative is to leverage a competitive edge across the interdependent country markets to change the scale and scope of competition. In contrast to Levitt's single standardised product, Hamel and Prahalad (1985) recommend a broad product portfolio. According to them, a global strategy requires a variety of products so that investments in technologies, brand names and distribution channel can be shared. The global strategic imperative is to seek cross subsidisation across product lines and markets, world brand domination and strong worldwide distribution systems. The strategic logic behind Hamel and Prahalad's (1983, 1985) prescription is that firms can attack rivals and defend their market shares by leveraging proprietary technology through proprietary distribution channel.
Ghoshal (1987) developed an organising framework for global strategy, which maps means and ends. He classifies the goals of a business organisation is into three categories: 1) achieving efficiency in its current activities managing the risks which it assumes in carrying out those activities and developing internal learning capabilities to bolster innovation and adaption to future changes. Ohmae (1985) views the world market as being composed of three major parts: USA, Japan and Europe. To be successful global competition, firms must become a triad power establishing strong competitive position in all three parts. Ohmae (1989) also argues that the key to global success in deliberate "insideration" of functional strength. Yip's (1989) contribution to this stream of writing is to develop a normative contingency framework of global strategy arguing that external market forces drive globalisation. To survive in the global market place, businesses must respond to imperatives. Yip defines a global strategy with five dimensions: 1) global market participation 2) Product standardisation 3) concentration on value adding activities 4) uniform marketing and 5) integrative competitive moves.
Nevertheless, there is still a great deal of ambiguity in the literature as to what a global strategy really means and when it should be used (Bartlett and Ghoshal, 1991, Ghoshal 1987, Porter 1991). As reviewed above, different writers have often adopted different views even confusing and contradicting ones.
LITERATURE REVIEW ON HUMAN RESOURCE MANAGEMENT
Today, in twenty first century, HR is emerging distinctively to combine the activities and processes of Human Resource Management (HRM), Human Resource Development and Organisational Development (OD). These three fields "grew up" clearly from each other and in many cases, distinct in theories and practices (Grieves and Redman, 1999; Sammut, 2001). Perhaps the change that has most affected organisations in the past years has been the increasing realisation that people are an organisation's major source of competitive advantage. It is now commonly believed that an organisation's "...success is determined by the decisions employees make and behaviour in which they engage" (Mello, 2002, p.4). It has never been more essential for an organisation to nurture and tap the strategic potential for people. Managing people as a key asset of an organisation has motivated HR to turn increasingly more effective at developing programmes and policies that influence talent to adjust with organisational competencies and at implementing organisational strategy. MacDonald (2003) says that, "creating next generation work environment - highly collaborative and capable of not just fostering but also encouraging, the instant, seamless movement of ideas and expertise will present both intellectual and technical challenges for us as professionals"(p.262).
CRITIQUE ON ARTICLES
Globalisation of HR at Function Level: Exploring the issues through international recruitment, selection and assessment process (Sparrow, P., 2006)
Method and Analysis of data collected:
Data collected by conducting semi-structured interviews with 15 different HR professionals and by using various case studies to fit into the theoretical sampling frame. The case studies included NHS, Barclay's international service, strategic health authority of south London and save the children health authority. The interviews lasted for half an hour to two hours and transcribed with the notes about emerging issues. HR managers were asked to provide the most insight of the realities of actual practice. The major focus was on HR issues and policies. The case study was then analysed and found the key issues arose from internationalisation. The conclusion drawn was that, in practice, global HRM revolves around the ability of an organisation to use the concept that has relevance to managers across different countries.
The research-analysed number of challenges as part of International HR function, there is a need for better micro theory to explain the gaps between the policy and practice in the area of international HR roles. The article examined only three questions as a challenge for International HR functions viz., globalisation process, recruitment and the strategy within the global recruitment process. This research therefore missed the other aspects of International HR functions. The analyses and results obtained from four different firms based in UK, which cannot be the case in all the firms. In other words, the conclusions derived from this research may be useful and applicable to certain number of firms.
RQ: 1 To ascertain Barclay's global strategy
RQ: 2 To analyse the effects of globalisation on Barclays and what ways does globalisation affect Barclays Bank
There is extensive discussion among banking professionals about the success of accepting a universal banking strategy and about whether the consequence of such a policy is the globalisation of banking industry. Lee (1996), Hutchinson and Nellis (1998) points out to the rise of globalisation in the Europe. The argument is that with comparatively low level of banking concentration in a number of EU countries, a strategy is in progress where banks are building market share within their nationwide through mergers and consolidations. The opinion conversely can be challenged from a number of viewpoints viz. 1) It assumes that globalisation is a normal extension of the universal banking model 2) It disregards the boundaries on the development of economies of scale and scope 3) It eliminates the probability that specialisation attained by concentrating on core areas of business can be a sustainable substitute strategy(Nellis. G., McCaffery, K.M., Hutchinson, R.V., 2000)
RQ: 3 To evaluate the benefits and downsides as well as the challenges and risks globalisation imposed on Barclays
When scrutinising the changing nature of European banking industry, it is appealing to emphasise on standard industrial economics approach of structure-conduct- performance in which banking organisations are observed as challenging among each other for market share (Frixas and Rochet, 1997). In this approach, cost competitiveness is at the core of bank strategy and is realised by both exploiting, for a given cost and output relationship, economies of scale and scope and adopting IT as a resources to cut down average cost curves.
RQ: 4 To discover the strengths and weaknesses of Barclay's HR policies under globalisation and in the current conditions of the UK economy
The continuing endeavour to reveal and measure the effect of HRM practices upon organisational performance has been defined as the "Holy Grail" of HRM research (Legge, 2001). The HRM performance literature has been able to state a great deal of success in creating the value of a system of HRM practices (Huselid and Becker 2000) though feasibly it is more precise say that the evidence is diverse (Wall and Wood, 2005:454, Godard, 2004:355, Boselie et al., 2005, Purcell et al., 2009). Implied within the HRM performance literature is the concept that the indication of improved organisational performance is enhanced individual performance and hence it is the skill of HRM practices to impact upon this. Nevertheless, regardless of its significance to the meta-level HRM performance relationship, there have been very few efforts to participate directly with the nature of individual performance.
RQ: 5To identify whether Human Resource Management facilitates globalisation
Dave Ulrich (1998) considers that Human Resource Management can help bring organisational excellence in the following ways:
- HR should become a companion with line managers and senior managers in strategy implementation
- HR should become expert in the way the work is structured and executed
- HR should become a winner for employees and
- HR should become a manager of continuous transformation.
Further Ulrich (1998) observes that there are five critical business challenges that organisations face nowadays viz. 1) globalisation 2) profitability through growth 3) technology 4) intellectual capital and 5) change. "Successful organisations will be those that are quickly able to turn strategy into action, manage process intelligently and efficiently, maximise employee contribution and commitment and create the conditions for seamless change"(Ulrich, D.1998).
There are different types of approaches to undertake the investigation. (CIPD, 2009)
- The objectivist worldview (positive research approach) which adopts a scientific method of collecting facts and testing the relationships to make generalizable conclusions.Postive researchers incline to value quantitative data.
- The social constructivist worldview (interpretivist research approach) which examines the meanings and experiences of different people in different situations in order to understand and explain different realities of human situations. Interpretivist researches appreciate the value of qualitative data.
In my research, I will use the interpretivist research approach as my research is exploratory wherein I will be exploring the reasons as to how globalisation has affected Barclays. I will also explore how Human Resource Management is coping up with globalisation challenges. I will also employ case study method in this research.
My exploratory research will enable the study to look at the problem both in descriptive and exploratory manner. It will look into the problem by exploring the views of different sets of respondents and by exploring different literature related to this study.
"The term 'mixed methods research' is often used to describe research that makes the use of both quantitative and qualitative data in a way that enables the insights to be mutually illuminating" (Bryman, 2006; Bryman and Bell, 2007; Saunders et al., 2007). Many researchers, practitioners realised the value of mixed research methods i.e. quantitative and qualitative with positive and interpretivist approach to develop their research.
In this research, primary and secondary data will be incorporated. The primary data for the study will be represented by the survey results acquired from the respondents. Surveys are the most common form of research method for primary data collection though it is associated with the deductive approach. The descriptive survey of the populations is valuable in understanding the audience and the definition of existence it the problem. The survey data are also helpful determining the cause and effects of relationship between variables. A semi-structured questionnaire will also be used for this research. This type of interviews provides the researcher the opportunity to probe answers, which can be done, in instance where there is a need for the interviewees to explain further in detail (Burgess, 1990)
This sample frame in this research will be the executives and the mangers of Barclays. As this research mainly concerns with the problems of globalisation, a sample of10 HR mangers if possible else, line managers will be selected. Moreover, the research area also explores the HR practices in Barclay Bank; a questionnaire will be distributed among Barclay's employees to assess global HR practices of their company. The questionnaire will be sent by email with covering letter stating the purpose of the survey and importance of it will be clearly described. I will send the questionnaires well in advance to ensure that the respondents get sufficient time to fill in the form and I get sufficient time to analyse them. The same population would be used for the telephonic interviews.
Data Analysis and Presentation
The data results will be analysed by determining their corresponding frequency, percentage and weighted mean method. The following formulas will be used to analysed the data.
- Percentage (%) : to determine the responses to the questionnaire
This dissertation will be presented in written form with addition of data charts to present the research results. Pie charts and network charts will be added to illustrate some of the analysed data. This however cannot be confirmed until the research data have been analysed.
Limitations of the Research
One of the potential limitations of this research is number of samples. Although the target number of sample is very less, this may be valid as the number of sample is enough to produce a general idea on the role of HRM in meeting globalisation challenges. Further recommendations for future study will also be provided to promote the continues investigation on this issue.
It is hard to say which method of collecting data (quantitative or qualitative) would be best for this research because each has its advantages but with limitations. Considering these issues, both quantitative and qualitative methods will be used for this research. Majority of the search however will be the secondary data. The secondary sources of data will come from published articles from international business, finance and human resource journals and related studies on globalisation and international banking industry.
There is a variety of methods to find out what the people in organisation think about their work organisation.
ETHICAL AND LEGAL CONCERNS
- Specific Ethical or Legal Concern: The project will abide by the rules and regulations outlined in the Ethical Approval Form, which identifies the policies and principles. It means that ethical approval will be sought for all questionnaires and interview questions. For this research, I will fill up Research Ethics Protocol Form and will hand it over to the university.
- Preservation of confidentiality and anonymity: The Company's data will be collected however; I will respect and maintain the confidentiality of any information or data obtained. The respondents of the survey will be able to choose whether to identify them or stay anonymous.
- Informed consent: This research will include primary data collection but it will not include any personal information of any individuals. I will make sure that I get the consent of the respondents in written before the data is collected. I will approach the line manager first and then if needed I will take the permission of higher authority or head office.
- Potential good or harm caused by the search: I believe that there will not be any harms of this research as long as the information of the company remains confidential. The merit of this research is that on the basis of the information obtained and data collected, I can figure out company's current situation and can suggest them some measures to overcome particular problems.
- Ethical guidelines in the field: this research will involve investigation of sensitive subjects, also the information will be commercially sensitive and hence I will ask the university administrator to keep the dissertation confidential. Moreover, I will also consult my supervisor at any point if I will be unsure of anything.
- Processing and storage of data: Before sending out the questionnaire and doing interviews, I will check them with my supervisor. I will make sure that the data will be kept confidentially. I will make sure that I keep the back up of all my work and keep the copy in my mail, pen drive and in laptop.
- Any Special Resources: I accept the fact that it would not be easy to access interviews with the bank executives and especially with the managers, I will ensure that I will give all my efforts to organise these interviews.
STAGE ONE : Reading and Research
- Reading and research into chosen topic
- Keep a record of useful sources
- Keep record of references to follow up at a later stage
STAGE TWO : The detailed Plan
- Refining research questions/hypothesis
- Designing the framework for literature review
STAGE THREE : Initial Writing
- Undertaking literature search and using the framework to develop the review
- Developing the methodology and identifying the appropriate method
- If required, arrangement for data collection
- Collecting the data
- Transcribing the data
- Analysing the data
- Developing the discussion
STAGE FOUR: The first draft
- compile and collate sections into first draft of dissertation
- check the flow of dissertation
- check the length of dissertation
- undertake any additional editing and research
STAGE FIVE: Final draft
- check for errors
- prepare for submission
- final proof read and editing
- compile bibliography
- get the dissertation bound
- submit the dissertation
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