To what extent has globalization impacted on the role of either the trainer or the human resources practitioner?
Category : Globalization
A. The Globalization Process
A manner of analyzing globalization in historical standpoint has to do with the economic and social account of global affairs, and especially with the history of past stages of speedy boost in global trade, investment, communication, and authority. There have been more than a few such instances over the past centuries that come to mind. Among is the export and investment explosions of the 1860s and the earlier part of the twentieth century are merely a couple of the more remarkable instances. (2000) The history of these early periods, and of the institutions with which they were connected, is of substantial contemporary attention. Nonetheless, international history has to be far more than the history of the affairs involving states in the context of their international relations, or their conflicts, or their invasions and domains. It is in excess of the history of exports and imports among countries. (2002) It is over a comparative history. It have to be a history of affairs involving persons and customs, as well as people who belong to quite a lot of diverse cultures all together or who shift among diverse identities, modes of speech, home nations, and even nationalities.
Characteristics of Globalization
Globalization, has acquired considerable emotive force. Globalization has its own meaning from different individuals. For some, globalization is a process that is beneficial, i.e. a key to the future world economic development and also inevitable and irreversible. Others regard it with hospitality even fear, believing that it increases inequality within and between nations or organizations, threatens employment and living standards and thwarts social progress.
Globalization (or globalisation) in its literal sense is a social change, an increase in connections among societies and their elements due to, among others, the explosive evolution of transport and communication technologies. The term is applied to many social, cultural, commercial and economic activities. Depending on the context it can mean: (a)closer contact between different parts of the world (globalization of the world, global village), with increasing possibilities of personal exchange and mutual understanding between "world citizens", (b) or (economic globalization), freer trade and increasing relations among members of an industry in different parts of the world (globalization of an industry), (c) or some negative exploitation aspects of economic globalization such as evasion of legal and moral standards by moving manufacturing or mining and harvesting practices overseas (1998).
Globalization is a powerful real aspect of the new world system, and it represents one of the most influential forces in determining the future course of the planet. It has many dimensions: economic, political, social, cultural, environmental, security, and others (2004). In popular discourse, globalization often functions as little more than a synonym for one or more of the following phenomena: the pursuit of classical liberal (or “free market”) policies in the world economy (“economic liberalization”), the growing dominance of western (or even American) forms of political, economic, and cultural life (“westernization” or “Americanization”), the proliferation of new information technologies (the “Internet Revolution”), as well as the notion that humanity stands at the threshold of realizing one single unified community in which major sources of social conflict have vanished (“global integration”) (2002).
Globalization has become identified with a number of trends, most of which have developed since World War II. These include greater international movement of commodities, money, information, and people; and the development of technology, organizations, legal systems, and infrastructures to allow this movement. More specifically, globalization refers to:
· An increase in international trade at a faster rate than the growth in the world economy
· Increase in international flow of capital including foreign direct investment
· Greater transborder data flow, using such technologies such as the Internet, Communication satellites and telephones
· Greater international cultural exchange, for example through the export of Hollywood and Bollywood movies
· Reduction in global cultural diversity through assimilation, hybridization, Westernisation, Americanization or Sinosization of cultures
· Erosion of national sovereignty and national borders through international agreements leading to organizations like the WTO
· Greater international travel and tourism
· Greater immigration, including illegal immigration
· Development of global telecommunications infrastructure
· Development of a global financial systems
· Increase in the share of the world economy controlled by multinational corporations
· Increased role of international organizations such as WTO, WIPO, IMF that deal with international transactions
· An increase in the number of standards applied globally; e.g. copyright laws
2. An inevitable process
There have been more than a few prior surges of "globalization," with augmented assimilation of capital, labor, and goods markets and remarkable technological developments, in the later part of the nineteenth and earlier parts of the twentieth century, but also in the 18th century. (2000) The early events ended in large extent on account of domestic political responses to new inequalities seemingly produced by globalization. Obvious indications could be seen of such domestic responses nowadays in the huge industrialized states in debates like that over outsourcing and lay offs. Early globalization periods similarly concluded as a consequence of the effects of external conflicts. Hostilities, even minute ones, make individual think more in the context of security and comparative advantages and failures, and a lesser amount in the context of common gains and collective goods. (2000) Foreign-created goods developed into a menace to national security, and are barred even supposing that segregation grants a high cost.
In a world preoccupied by conflict, the rules that are unavoidably necessary in working a mutually dependent international order are reinterpreted as being the random provision of a hegemonic authority. In the later part of the 19th century globalization, foreigners perceived Britain as in the top of the waves for the reason that she relinquished the rules. (2000) In the earlier part of the 21st century, a lot of non-Americans perceive globalization as an annex of American supremacy and rebuff it on these arguments, even supposing they may possibly be aware that this denunciation will be pricey and will boost poverty. (2000) It is at this point that one could perceive that globalization is not inevitable.
HUMAN RESOURCE PROFESSIONALS
All companies and organizations are governed by their basic goals and objectives. These objectives are often regarded to as the “corporate vision” or “corporate philosophy” (2001). Thus, certain strategies are being implemented with the aim of achieving these goals and objectives, and this constitutes a key element in the characterization of a company or organization. Human Resource Professionals are undoubtedly an important indicator in determining the characteristics of a company or organization.
It is a well known fact that human resource professionals play a crucial role towards differentiation and a potent source of competitiveness for any organization or company. Therefore, any organization must constantly invest in human resource professional development even during periods of recession. However, the determination of the extent to which an organization can invest in terms of human resource professional development depends on the financial capabilities of the company or organization (2004). Finances will also be carefully considered in determining the target for training and development, because it should jive with the basic policies of an organization’s human resource development strategy.
Human resource professional development in most organizations and companies in the past decade has gradually transformed from low-level activities into high-profile contributors to organizational success (2002). However, budgets are also elevating at a faster rate than the gross national product. In the midst of this growth and increased influence, managers and executives of companies and organizations are left with confusing question: How can HR professionals reconcile the need to become more strategic with the demands of managers to carry out the traditional personnel roles?
Companies have already begun to rethink and reorganize their traditional international strategies due to the globalization of markets and the ever-growing competition in the international business arena. For multinational companies to be successful in the global market and remain their competitive edge against other companies, they must develop strategies that will transact business that will take advantage of global resources and markets. As managements begin to develop and implement global strategies, they also begin to concern themselves with issues regarding global human resources. Undeniably, HR (Human Resources) issues are among the most critical issues for the success of multinational companies.
The function of international human resource management (HRM) can be viewed as the principal provider of the “soft” coordination instruments; as a result, its importance has increased tremendously. Globalization along with relative alterations in strategies has changed the role and content of international HRM and has brought it closer to the strategic core of business. The four international HRM tasks are known to increase the coordination of globally dispersed activities in multinational companies as it underpins the development and functioning of an integrated network on strategic, organizational and individual levels: (1) international transfer of managers, (2) provision of management training, (3) use of international teams, and (4) design and implementation of performance evaluation and reward systems.
Goals / Objectives of HR Professionals
HR Professionals have four main objectives:
A) Remain one of the top professionals in terms of educating and entertaining people. Being on top of the industry enables HR professionals to command the respect and confidence of the public. Thus, the HR professional is able to expand its expertise aside from the traditional personnel roles through the acquisition of critical knowledge and skills (2001).
B) Gain more income than other professionals. The services that are being laid down by HR professionals are able to meet high quality standards of their clients. As a result, Hr professionals are able to earn more income as against other professionals in other industries.
C) Establish the best brand of quality HR services; and
D) Maintaining its independence. Being independent allows Hr professionals to continue their tradition of excellence in both its services by setting new trends and standards.
More often than not, human resource professionals don't really make an immediate impact upon performance of the traditional personnel roles. Instead, they engage in activities that gradually propel them towards the high level of importance. However, the roles that human resource professionals play are not limited to traditional personnel roles. Activities such as educating the public and other social responsibilities are often related with human resource professionals. A great deal of emphasis lies on the efficiency and effectiveness of these roles. Therefore, understanding human resource professionals includes the analysis and management of their significant roles (2003).
HR Professionals and the Traditional “Personnel” Role
The traditional “personnel” role often associated with HR professionals can be summarized into three (3) main roles. These are:
· Planning and Strategy Formation Role
Planning and strategy formation nowadays has created the need for human resource professionals to become aggressive especially in the area of marketing themselves. This is because the access to strong distribution channels is critical for their continued popularity.
· Decision-making Role
Upon arriving at the correct decision or choice, the human resource professional now gains confidence in his / her ability to make critical decisions or choices especially when his / her integrity is on the line. Thus, this human resource professional will now search for even more challenges and opportunities where he / she could further enhance his / her decision-making abilities regarding current human resource issues.
· Analytical Role
Through the exposure to various puzzling human resource issues, the human resource professional along the process is able to develop a holistic mindset regarding the issues surrounding him / her. The human resource professional now becomes a keen observer of the truths and lies surrounding the issue being tackled, instead of relying on mere hearsays. The continuous pursuit of the truth behind the puzzling issues enables the human resource professional to consistently practice and enhance a healthy and holistic mindset which makes it difficult for detractors to give influence. Because of this holistic approach, the human resource professional is able to effectively select the right choice and continue to maximize this potential for future use (2002).
It is interesting to know the basic innate characteristics of human resource professionals which contribute towards the effective pursuit of their traditional personnel roles.
· Mental Stability
Mental stability is crucial especially in the pursuit of the correct decision as well as the management and development of the processes accompanying it. It is important for human resource professionals to remain updated with the latest developments to be able to stay aware and knowledgeable in all issues.
· Performance and Credibility
The production of their best human resource outputs comes as a result of well-funded research management and development activities. The strong performance of human resource professionals and their outputs could also be linked to the effective strategic planning and human resource mobilization. Thus, the human resource professional’s credibility increases as his / her performance becomes better.
The Impacts of Globalization on the Human Resource Professionals
A. HR Professionals and the Need to become Strategic
In lieu of the present developments in human resource professional development caused by globalization, there have been significant visions of learning that evolved. A majority of these learning visions are based on the idea that human resource professional development is a social process where knowledge is denied instead of being acquired passively. Learning, then, transforms into an interactive process. The interaction is being verified through the help of the participants in the learning process such as the human resource professional and the managers. In this framework, becoming strategic would mean the continued guidance and support of the active learning process. Obviously, this would call for an intensive and phased guiding strategy ( 2004).
When in the active pursuit to become strategic, the interaction of human resource professionals with the managers forms an integral part towards its success. Collaborative learning as a strategic method is gradually being used by human resource professionals nowadays. Through this approach, the human resource professional can become strategic through the imitation of common human resource development techniques in the socialization processes. In the process, the human resource professionals are able to obtain the chance to see their own ideas in a different aspect and therefore be able to take alternatives into consideration. The relative effectiveness of this approach is determined with the capability of the human resource professionals to continuously challenge their pre-acquired knowledge by trying to adapt to the interpretations of their managers (2003).
Aside from the managers and the HR professionals, the different resources of strategic learning belong to a third category of factors of a learning environment. Moreover, strategic learning methods have shown signs of significant growth over the past years. Consequently, obtaining knowledge becomes more complicated. This is because the transformation of all this information into strategic knowledge requires the managers to possess the appropriate reference frameworks.
B. HR Professionals and the Development of Corporate Strategy
HR professionals help companies and organizations in aiming for sustainable growth as well as for segment leadership in their respective industries. HR professionals help companies and organizations to establish its broad leadership usually by redefining their corporate strategies and their products and services. The changes or redirection of the corporate strategy of an organization or company may include offering training to its employees, improving the company operations, and the introduction of new technologies then reinforces the positions of the various products of the company. This practically results in economies of scale that is able to create a distribution network for both the local and international products of the company.
The role of HR professionals in the development of the corporate strategy is to help that particular company or organization in securing the growth of their business in a sustainable manner, while at the same time constantly improving the company’s profitability. The strategy being employed by HR professionals to achieve this involves four elements:
- Encouraging companies and organizations to strive in order to reach a leading position in attractive markets
- Development of a corporate strategy focusing on securing a competitive share of the market segments.
- Working in order to improve the company’s efficiency and cut costs in operations.
- Aiming for continuous growth through selective acquisitions for as long as the company can create shareholder value.
The recent efforts of HR professionals to reconcile the need to become strategic with the demands of managers to carry out the traditional personnel roles would definitely make progress with the growing role of information and communications technology (ICT) in the human resource development. This fits in with the larger need of HR professionals towards reconciling with the demands of managers. Therefore, the reconciliation process would become possible if the HR professionals are fully adapted to ICT. Nowadays, HR professionals are more and more using artificial intelligence systems in order to carry out their traditional personnel roles (2002).
The traditional personnel roles of the HR professionals are being influenced by the interaction of two major factors. On the one hand, the instructional factors: the human resource philosophy brought about by the HR professionals and its conversion into didactical ideas. On the other hand, organizational factors: the managers, staff, infrastructure and policies related in this area. It is obvious that the HR professional must possess a sound vision of policies and the efficient use of the operating budget in order to effectively reconcile the need to become more strategic with the demands of managers to carry out the traditional personnel roles ( 2003).
Nevertheless, these HR professionals need an interaction between both factors. This is because in order to respond to the new visions of learning, they will eventually transform into a model together with the various aspects of the reconciliation process. In return, the managers will have to continuously monitor their limitations and along the process introduce innovations.
C. Expatriate Staffing
With globalization as the trend in doing business, many companies are expanding their avenues for growth as an organization by branching out to different countries, be it in Asia or the Western regions. Li Ka Shing’s, the wealthiest man in Asia who has an estimated worth amounting to $12.4 billion according to the Forbes Magazine, has business holdings that presently spans 40 countries worldwide. Hong Kong entrepreneurs like him who has succeeded in bringing their domestic businesses to the international market makes the rest of us wonder what lies behind their accomplishment.
The people who work for them at the countries where they decide to establish branches play a great role in their global growth, as the owners themselves cannot be physically present in such and such countries at the same time. Unilever Corporation, as an example, has companies scattered around the globe, and some of their managers move from company to company across countries to help build a common corporate identity and business culture among their management ranks (. It is now readily acknowledged in both geographical and international human resource (IHR) management literatures that in order for transnational companies to further achieve progress, the development of expatriation in the world system is highly crucial. Therefore, personnel management is a vital aspect of handling their ventures, which basically means that they have to choose the right people to work for them abroad, specifically the key management positions. But the story of staffing does not end there. In fact, it is only, as they say, the ‘tip of the iceberg’. Sending the right people to these international offices require planning and much researching, as ‘out there’, the expatriates are faced with a whole set of different culture and are subject to a whole lot of new laws to follow.
There are four staffing policies used for global operations: the ethnocentric, polycentric, regiocentric and global staffing policies. An ethnocentric staffing policy fill key positions with home country nationals while a polycentric policy, local people are hired as employees of the business. In regiocentric, potential candidates are recruited from within the region. For example, a multinational enterprise in Chile would pick from applicants from within Latin America. The global staffing policy, the kind which is now being used by most European multinational companies, hires people from within and outside the organization, regardless of nationality. The choice of staffing policy to use is affected by the culture and implementing laws of the host country as those will determine what policy would work best. Even though the employment regulation laws developed by international organizations are not so many, all companies operating on the global level must abide by the different employment laws in the host countries in which they operate, coupled with also following whatever standards in employment that international laws set. What follows are the considerations that a multi-national enterprise could need to look into in the course of strategy planning for expatriate staffing.
Expatriation continues to be a key issue for multinational companies. Historically, expatriation has long been viewed as the “process of moving from the parent company or headquarters to foreign subsidiaries or overseas operations”; however, (2004) view expatriation as the “process of moving from another country while staying in the employment of the same firm”. Expatriation can take on many forms. At one specific location in an international firm, an individual manager may be a third country national and at the same time an expatriate from another country employed by and represents the parent company or he/she may be a transferee from one subsidiary to another (2004).
Various most important and difficult challenges in the operations of international HRM arise from the differences encountered in various countries’ cultures (2004). Culture can be defined as “socially transmitted beliefs, behavior patterns and values that are shared by a group of people (2005). Communication and the transaction of business are very much affected by culture. It affects how business is transacted and organized (2005). In addition, culture gives a group of people a sense of who they are, of belonging and of how they should behave. It provides people the capability to adapt to certain situations and to convey this knowledge to succeeding generations for countries or to new employees for organizations. Furthermore, culture has one way or another influence on the management process of organizations – how people think, solve problems and make decisions (2004).
The nature of international management tends to bring people of various cultures together resulting to daily issues of intercultural communication and management. To give more light in the issue of the importance of culture for multinational companies, particularly in the area of international HRM, let us examine one situation. Let us say that an international HR manager of a multinational company is staffing foreign operations. When staffing foreign operations, local culture and environment can have a major effect on the definition of jobs and job candidates, as well as the qualifications of the candidates for the said position. According to (2004), what may appear by name to be a job that is similar to what the international HR manager is familiar with from his/her home country may necessitate different skills in another country or be based on totally different qualifications. For instance, in regions and countries such as Japan, India, Middle East or Latin America, personal or family connections may suggest the most important considerations for hiring. In fact in other areas such as Africa, hiring basing on the membership of an individual’s family group may primacy over the technical expertise or experience of the job applicant. As a firm enters a new country and operates its activities like hiring and utilizing its home country’s policies and practices may cause considerable lack of trust and alienation in the local country which can further result to circumstances such as attaining a less quality workforce (2004)
Moreover, it must also be noted that culture plays a major role in the success of expatriate managers. Companies need to recognize the crucial cultural variables relative to success to be able to select and train expatriate managers more efficiently and increase the success of their expatriation process (2005).
Dependent Variables: Intent-to-Turnover
(1995) have observed that studies in the area of expatriate turnovers are either focused on the actual expatriate turnover or have used intent-to-turnover measures. In a study made by (1982), he evaluated and assessed expatriate turnover on a post-hoc basis ( 1995). This has remained the most valid and accepted measure of turnover; however, it has some limitations for organizations interested in expecting and analyzing potential turnover, as the factors causing turnover and other sources of managerial discontent can only be addressed after the employee has left (1995). Much intent to turnover measures has been developed. Some has focused on plans to stay with a specific organization, looking for factors promoting decisions to leave while others looked at alternative employments as catalysts to turnover. Results have these studies showed that dissatisfaction with one more or more aspects on work such as pay, promotion opportunities, coworkers and supervisors caused alternative job-seeking activities. In addition, as the researcher reviews expatriate turnover, the researcher discovers a broadening of the traditional “intent to leave the organization” measure. Prior studies on expatriate turnover has used external turnover (i.e. intent to leave the firm) as the major dependent variable; however, other studies have revealed job-related factors as expatriate discontent ( 1995).
Problems Associated with Expatriation
Expatriates play a very important role in the international strategies of multinational companies; however, it must be noted that failure of expatriates are certainly not unusual. Failure of expatriates would include the premature termination of the assignment and actual costs for its failure were reported to reach $55,000 to $250,000. In addition, indirect costs of expatriate problems would also include loss of company reputation, failed negotiations, expatriate depression and loss of self-esteem and family dysfunction (1997). Further researches also show that expatriate experience is usually a negative one. In relation to this, (2005) adds that number of repatriates’ assignments, time return from overseas and family accompany were found to be considerably associated for the employee to leave the organization. Moreover, it is noted that there is steady decrease in career developments and promotion opportunities upon repatriation (1997). The failures of expatriation have consequently influenced potential expatriates. Employees begin to be reluctant to expatriate offers as they hear failures and turnovers caused by the assignments (1997).
Factors Associating with Employee Willingness to Work Overseas
(2005) have identified four major factors that affect the willingness of employees to take expatriate assignments. They include employee personal characteristics (sex, age, marital status and children, international experiences), employee job and relocation attitudes (international interests, ethnocentrism, career focus, organizational commitment, readiness for relocation, attitudes towards moving), spouse characteristics and attitudes towards relocation (spouse employment status) and organizational relocation support activities (career planning, repatriation support, compensation support, family assistance support).
As a person with knowledge of the impacts of globalization on the human resource practitioner, the author has always brought up to his superiors the viability of strategy formation regarding human resources management and at times fail to understand the reasons or logic behind certain strategic implementations imposed on its distribution.
By delving into this project paper, the author intends to have better insights into how human resource management is thought up, formulated and then imparted down. The author hopes to have an in-depth understanding as to how the HR professionals reconcile the need to become more strategic with the demands of managers to carry out the traditional personnel roles.
In order to reinforce the learning objectives, two key focal issues were focused upon, i.e. innovation and diversity. Innovation was discussed with regards to human resources management where it was renowned for its developmental capabilities to constantly innovate. Diversity came under strategic thinking and formation as the author considered the diverse culture, political climate, economic surroundings, social environment, technological settings, government policies and legal systems in order to understand the role that HR professionals perform.
The results of the analysis carried out on the impacts of globalization on HR professionals indicated very significant effects, even amidst the threats of unrest. Therefore, we could conclude that the HR professional’s traditional personnel roles could still be expected to increase faster than average.
The review of the HR professional’s capabilities and resources revealed very little inconsistencies regarding their need to become strategic. This is coherent with their traditional inside-out approach. However, the need to reconcile both the inside-out and outside-in approaches becomes imperative now for the HR professionals.
The analysis among the reconciliation process as well as the traditional personnel roles of the HR professionals revealed certain gaps, most of which are biased towards the environment. However, these gaps paved the way towards determining a number of recommended strategic options to secure the HR professional’s competitiveness.
Also, the HR professional has to find a balance between adherence to internal forces and to the changing forces of the environment in order to effectively reconcile the need to become more strategic with the demands of managers to carry out the traditional personnel roles.
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