Globalization Implications on HRM and Challenges for People Management within Organisational Setting - Essay Example

? Critical Analysis of Globalisation Implications on HRM and Future Challenges for People Management within Organisational Setting : Institution: Date: Table of Contents 1. Introduction 3 2. Critical analysis of Globalisation Implications to HRM 5 a. Overview of Globalisation and HRM 5 3. Factors Promoting Globalisation 7 a. Shortage of Talent in Developed Countries 7 b. Technological Advancement 8 c. Availability of Low Cost Labour from Emerging Countries 8 4. Challenges of Globalisation 9 5. Future Challenges for People Management within Organisational Setting 9 a. Changes in Political and Legal Environment 9 b. Changes in the Economic Environment 10 c. Technological Advancement 10 d. Newer Organizational Design 10 e. Changing Workforce Profile 11 f. Increasing Quality Consciousness 12 6. Remedies to Future Challenges 12 7. Conclusion 13 References 15 1. Introduction Globalisation has been depicted as construction attributed to a free flow of ideas regarding human resources among different countries through information technology (Kapoor, 2013, 2). In fact, this has called for mass media involvement, thereby presenting changes and competitiveness experienced in business environment across different countries in the world. On the other hand, national culture is a given country has been converted into a strategic issue by globalisation, thereby creating a need for proper HR management. However, globalisation is attributable to difficulties experienced in balancing global trends identified in human resource management. Furthermore, these difficulties are experienced in context of influence resulting from national culture to human resource management (Cesyniene, 2008, 3). Nonetheless, analysis globalisation of implication on human resource management focuses on other issues such as competition and challenges involved in operating diverse cultural settings (Celia & Vazquesz, 2007, 20). This paper will conduct a critical analysis of globalisation implications on human resource management, and it will identify future challenges that are likely to be faced by HR managers within organization setting. Competition and increasing economic dynamism are some of significant factors promoting globalisation (Plessisr, 2009, 16). In fact, this has resulted into unprecedented results such as increased competitiveness among private and public sectors in numerous countries around the world. There are significant measures that are taken by human resource managers to gather information regarding development strategies that are vital in human resource management. Therefore, in different organizations around, human resource departments are focusing on implementing strategies that facilitate transformation of business in order to cope with modern challenges and exploit opportunities in the business environment (Belcourt & McBey, 2010 6). Globalisation has facilitated significant transformation of human resource; in this case, businesses can connect to new places around the world, and managers can make decisions that are supported by information gathered from different parts of the world. In addition, globalisation is widening talents through development of pools comprising of marginal, permanent or fluid employees. Globalisation has also promoted processes of establishing a market oriented development strategy, thereby creating more opportunities to world’s economy. In this case, the world has been converted in to a single interdependent global market place, which is attributed to increasing competition and economic change; in fact, these changes have a significant degree of unpredictability (Ozbilgin, 2005, 45). Competitiveness has been established on a state or enterprises level, where value is added to global economic products, services and process that involve human resources. Therefore, this competition calls for knowledge and skills, which are offered by human resources in organizations. Furthermore, knowledge and skills are crucial elements of a workforce, and they have become sources of competitive advantage (Byars & Rue, 2006, 32). On the other hand, globalisation is creating a foundation for building and managing knowledge and continuous learning among employees. There are challenges faced by human resource manager in present business environment. In fact, there are increased chances of facing more challenges in the future due to factors such as globalisation, workforce diversity, increasing technological advancements, legal and political environments (Morley & Collings, 2004, 5). Therefore, these challenges will exert pressure on human resource managers, whereby they will be experiencing difficulties in attracting, retaining and nurturing talents among their employees. In this case, these challenges cannot be ignored by human resource mangers; thus, they are expected to develop mechanisms that can facilitate acquisition of skills and competence by their employees. 2. Critical analysis of Globalisation Implications to HRM a. Overview of Globalisation and HRM Different organizations around the world have been facing issues regarding homogeneity and convergence due to globalisation. In this case, human resource managers are focusing on implementation of strategies, developing structures and processes that can meet expectations of consumers in terms of employee performance (Ohmae, Brewster & Hillary, 2004, 23). On the other hand, business environments around the world have been re-organized by globalisation, whereby this has led to dominance of capitalist economic system. Nevertheless, globalisation is facilitating erosion of organization cultures and traditions through transitions undertaken in order to cope with increasing competition in business environment. Increasing complexity in the business environment, has led to a degree of uncertainty that is associated with globalisation. In fact, globalisation has influenced human resource management by fostering and spurring rapid changes through information and communication technology (Hitt & Colella, 2006, 43). Moreover, this is making the world economy to become interdependent, and it develops a free flow of trade and investment among nations. Globalisation has also led to increased efficiency among employees, which results to improved productivity, thereby facilitating production of high quality product at affordable prices (Faugoo, 2009, 124). Consequently, this has promoted increased efficiency in human management department, thereby promoting employee satisfaction and motivation. Global economy and culture has been converted into a network society that is based on new communication and information technology (Rosenblatt, 2011, 4). Globalisation has facilitated a continuous process of modernisation, which has a significant influence on employees by offering them freedom, motivation and satisfaction (Dessler, Griffiths & Lloyd-Walker, 2004, 23). Furthermore, globalisation is considered a new form of imposition through a critique perception. Nevertheless, there is perception that globalisation has caused domination, control of world’s economy by developed countries, and this has contributed significantly to revolution of human resource management in developing countries. Employment trends in different parts of the world have been greatly influence by globalisation, and this has led to a need for outsourcing (Harrison, 2003, 30). In fact, outsourcing is perceived to be a form of shift aimed at revolutionising business operations. On the other hand, globalisation has caused alternation of organization structure, thereby leading to changes in expenses incurred through human resource (Sparrow, Brewster & Hillary, 2004, 30). Therefore, globalisation has caused establishment of trend in human resource department, whereby employees are outsourced and this results to a loss of permanent employment opportunities. For instance, there are organizations in America, which seek cheap labour supply from countries such as China, Mexico and countries in Africa. Globalisation has increased employees productivity in countries such as United Kingdom, though this has been achieved through downsizing or closure of organizations. Therefore, globalisation has contributed to difficulties experienced by employees, such as those experiencing situations of downsizing. Human resource managers have been seeking ways to deal with problems caused by globalisation (Lundy & Cowling, 2001, 341). In this case, HR managers are focusing on developing some outplacements programs in order to deal with problems caused by downsizing. Therefore, these programs focus on offering details that present employment opportunities in a given organization. In addition, employees are coping with social development established by globalisation and complex relationship concerning internationalisation (Luthans & Youssef, 2004, 20). Impact of globalisation on human resource management has been promoted by technological developments, which contribute to dissemination of information at low costs. In this case, globalisation can promote liberalisation of foreign investment rules, thereby facilitating migration. For example, there were globalised strategies and globalisation patterns, which were applied in Tokyo and this resulted to significant internationalisation during 1980s (Debroux, 2004, 24). Therefore, though globalisation, numerous organizations in Japan joined international trading agreements, thereby giving them the capacity to perceive the world as a single target market, while developing their products (Selmer, 2001, 235). 3. Factors Promoting Globalisation a. Scarcity of Talent in Developed Nations There are few talents in developed countries such as America, Germany and Japan, regardless of prevailing economic recession and rate of unemployment. In fact, this shortage is attributed to increasing aging population and retirement in these countries (Ivancevich, 2002, 53). In this case, the number of workers retiring is higher compared to labour supply in these countries. For instance, there are expectations that by 2020 there will be a significant shortage of labour supply, whereby for every five workers retiring, there will be only four workers to fill these vacancies, in developed countries (Khatri, 1999, 516). For example, there it is essential to deal with an estimated shortage of twenty six million employees before 2030 in order to sustain economic growth, which has been acquired for the last two decades (Meisinger & Ulrich, 2005, 32). However, technological infiltrate caused by globalisation has led to replacement of work force. Nonetheless, there are shortages expected in industries such as manufacturing, construction, transport, public administration, communication, trade, information technology, hotel, financial services, health care and education (Akoorie & Scott-Kennel, 2005, 49). b. Technological Advancement There are significant technological advancements that have promoted globalisation in the world. In this case, impacts of globalisation on human resource employment have been facilitated by technologies such as internet, enterprise resource planning, business analytics, and data warehousing (Friedman, 2004, 25). For instance, technological developments associated with globalisation such as internet, windows operating systems, global fibre-optic network and creation of interoperable software applications has influenced human resource management. Globalisation has enabled creation of global platform, which facilitates collaboration and competition, sharing of information and ideas (Friedman, 2004, 34). Therefore, technological advancement has contributed significantly to globalisation; thus, employees from different parts of the world can communicate and change their perceptions towards human resource management. c. Low Cost Labour obtained from Developing Countries Developing countries such as Brazil, India and China are source of cheap labour for developing countries such as America and UK (Bartlett & Ghoshal, 2000, 101). Therefore, through globalisation, organizations among these developed countries are able to utilize opportunities that can attract top talents from developing countries. There is a significant difference between developed and developing countries, which is presented by population growth. For instance, in the present, annual growth rate is below 0.3 percent in developed countries such as America and EU (Kapoor, 2013, 10). Nonetheless, population in the developing world is increasing six times as fast. Furthermore, globalisation has led to increasing number of migrants to developed country, whereby they supply cheap labour to industries in these countries. 4. Challenges of Globalisation Management of workforce by various global organizations has experienced significant challenges on human resource departments. In fact, these challenges are caused by factors such as language barriers and cultures in different countries (Evans, Pucik & Barsoux, 2002 312). Businesses are focusing on ways to familiarize themselves with ways through, which employees can understand consumers’ needs. Therefore, the human resource mangers focus developing global mindsets among employees through globalisation. Nevertheless, globalisation among multinational organization has been focused on integration of diverse value in systems that offers shared global value (Zanko, 2003, 34). In this case, in order to deal with challenges caused by globalisation there is need to develop ways of facilitating communication among employees through coordination of activities, thereby achieving set objectives. 5. Future Challenges for People Management within Organisational Setting a. Changes in Political and Legal Environment Human resource managers are bound to experience challenges caused by changes in both political and legal environments. For instance, these changes will lead to introduction of new laws, rules and regulation that will affect their functionality (Edwards & Kuruvilla, 2005, 19). Legal and political frameworks are changing significantly, thereby influencing industrial relation systems, and this may result to future challenges (Kaufman, 2001, 340). In this case, human resource managers will be expected to assess implications of these changes on human resource and industrial relations involved. Therefore, human resource managers will be able to introduce relevant strategies for adjustments (Hutchinson & Purcell, 2003, 3). For instance, they can focus on introduction of ways to utilize human resources through participation in these changes and preparation in order to face future challenges. b. Changes in the Economic Environment There are there future challenges that are likely to be caused by factors in economic environment such as production. For instance, human resource managers are exposed to a risk of facing problems concerning insufficiency of raw materials and inputs, which can result to increased cost of production and employees lay-offs (Crafts, 2004, 45). Therefore, this will result to cases such as strikes due to layoffs and underpayments caused by increased production costs (Decenzo & Robbins, 2001, 32). On the other hand, increasing inflation may result to decreased purchasing power among employees and this may led to demands to increase employees’ salaries. In this case, there will be challenges caused by increasing costs due to employee welfare and benefits. c. Technological Advancements The rapid changes caused by technological environment may pose future challenges among human resource managers. In this case, HR managers will be unable to cope with changes caused by rapid technological advancements, such as rendering some task obsolete. For instance, some of the changes caused by technological advancement include a reduction of job vacancies that require low level of skills (Hashim, 2012, 43). On the other hand, the technological advancement will lead to increased number of job vacancies that require high level of skills. Therefore, technology advancements are likely to cause unemployment, thereby resulting to insufficiency of skilled work force (Miller & Cardy, 2000, 450). In this case, changes resulting from technological advancements will cause challenges in the future to numerous organizations. d. Newer Organizational Design Organizations are focusing on identifying and gathering new ideas in order to attain competitive advantage that can help them survive in highly dynamic business environment. However, there are challenges involved in adoption of these ideas due to need for developing interest in establishing new working strategies (Wiesner & Millet, 2003, 43). On the other hand, there is a significant cost involved in implementation of new strategies in order to develop a new organization design. For instance, there are situation where managers are focusing on altering design where they are replacing division of labour and permanent jobs with temporary job vacancies (Desimone, Werner & Marris, 2002, 53). Therefore, changes aimed at transforming the organization through structures and field of work may lead to significant challenges in the future. e. Changing Workforce Profile Work force profile among developing countries such as India has been changing significantly. For instance, there are new expectations concerning skills and knowledge among employees due to increased competition (Macky, K, & Johnson, G, 2000, 21). On the other hand, HR managers are focusing on ways to understand the workforce through a shift from inclusive corporate culture to development of significant understanding of factors such as demographics, skills, personality attributes among employees and their perspectives concerning organizational culture (Mello, 2003, 32). Moreover, there are increased chances that HR managers will focus on employing young people and this will lead to changes in employees’ profiles and expectations. Therefore, this will result to a challenge in coping with their expectations through provision of increased salaries and offering desired working environment (Dessler, 2002, 60). In this case, HR managers will have to deal with challenges in order to develop relevant job previews that can contribute significantly to establishment of a design that facilitates retention of employees in their organizations (Storey, Quintas, Taylor & Fowle, 2002, 17). f. Increasing Quality Awareness Consumers are increasingly acquiring knowledge regarding products and services offered in different markets. In fact, this is also attributable to global level competition among organizations that can results to compelled focus on quality assurance for customers. In this case, consumers have developed positive attitudes organizations offering high quality products and services to consumers (Aruna, 2011, 23). Therefore, HR managers are likely to face challenges in the future through their effort to select employees, who have capability and techniques that lead to production of quality products and services (McKenna, & Beach, 2002, 45). In this case, there is a likelihood of facing challenges in designing actions to achieve requirements by customers. Furthermore, there will other problems, which will be caused by new technological changes aimed at developing acceptance among employees. Therefore, there is need for HR managers to consider making relevant strategies to deal with these challenges. 6. Remedies to Future Challenges Organizations are expected to comply with all rule and regulations formulated by the government. In this way, theses organizations can avoid facing challenges resulting from changes in legal and political environment (Irshad, 2008, 23). Different organizations around the world are competing with an aim of attaining good public image that can result high profitability. Therefore, considering challenges that have been identified, HR managers are expected to take responsibility of training workers on ways to offer quality products and services to customers (Wong, 2003, 54). Through this way, organizations can generate sufficient profits that can support them during economic recessions. However, there is need to reinforce desirable behaviours and performance, which is portrayed through commitment and loyalty. There is need for HR managers to consider the technological changes, which have a great influence production, recruitment process, training techniques and use of equipments (Mellacheruvu & Krishnamacharyulu, 2008, 20). For instance, HR managers should focus on acquisition of new technological devices that increase competitive advantage in an organization. Furthermore, HR manager should focus on training employees on ways to handle these technological devices in order to eliminate problems caused by these technological changes. Dealing with challenges caused by changes in workforce profile can be handled through introduction of strategies that can be applied in identifying talents that can add value to organization (Losey, 2005, 43). Therefore, HR managers should focus making arrangements through functions such as recruitment, staffing, promotion, placement and demotion in order to cope with changes occurring on the workforce profile (Forster, 2005, 32). Dealing with problems resulting from increased quality awareness by consumers, the HR managers are expected to focus on coping with issues relating to Globalize Human Resource Management (GHRM). In fact, GHRM refers to a concept that focuses on implementation and preparation of employees with skills that meet expectations of consumers from different parts of the world (Edwards & Rees, 2006, 6). 7. Conclusion The paper has conducted a critical analysis of globalisation implications on human resource management, and it has identified and discussed future challenges that are likely to be faced by HR managers within organization setting. The paper began with introduction section that gave an overview of globalisation and future challenges of human resource management. The other section covered a critical analysis of impact of globalisation on the HR management. In this section, the paper outlined and discussed in great lengths, factors that has promoted globalisation in human resource field. Finally, the last section explored future challenges that are likely to be faced by human resource managers, thereby identifying remedies to solve these challenges. 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