Impact of Globalization of the International Human Resource Management - Research Paper Example

International Human Resource Management       Since the post globalization era human resource management concept has undergone remarkable change across the world. It is widely known that work culture, commitment of employees towards an organization and employee-organizational relationship vary in different cultural and national context. As globalization has resulted in cultural intercourse to a greater extent compared to the past and it also created huge impact over existing work culture of a particular nation, (Warr, 2007, p. 287) several changes have also occurred at the International human resource management context. The idea of organizational culture is gainaing importance in understanding the companies and their structure. (Beaumont, 1993, p.36) In current times, elements of culture and tradition are not sole determining factors for identifying human resource management of a company but at the same time several other factors, including, socio-economic conditions, political and legal aspects have also become important factors that play a great role in determining human resource management of an organization or take a leading part when it comes to launching certain policies by the HRM department of an organization. (Poole, 1999, p. xxv) Linda Holbeche, in her book, Aligning Human Resources and Business Strategy has rightly observed, “… corporate strategies tend not to be made in isolation – they should take into account the changing need of external stakeholders such as customers, the changing business environment, including markets and the critical resources needed to carry out the strategic aims. These critical resources include such factors as capital and technology, and increasingly rely on people – their brain power, access to information and ability to learn new approaches.” (Holbeche, 2001, p. 83) While implementing strategies “Differentiation and customer service” have also been main points of focus of HRM department of an organization. (Grundy and Brown, 2003, 36)       Thus, while human resource department of a company is about to take certain decisions, it needs to keep in mind both the external and internal factors that can also be consequently affected due to such decision making process. (Pieper, 1990, p. 121; Dowling, Welch, Festing and Engle, 2008, p. 18) Looking at the business scenario of United Kingdom, it is also understood easily that the organizations have also encouraged these aspects to enter the modern business scenario so that the decision making process of the HRM department can facilitate organizational benefit as well as welfare of the employees. (Towers, 1996, p. 308) In this context example of ChocCo can be cited. “The corporate culture of ChocCo is a result of its traditionally paternalistic employment practices.” (Storey, 1996, p. 73) Thus, since the 1980s onwards, to make the managerial functions more flexible for employees the organization has undergone drastic change from its traditional approaches.       It has often been said that managerial planning of an organization is dependent over three questions that the managers ponder over current position of the company in the market, then they identify their vision or would be position in the market and finally, tracing out the possible avenues that can lead the companies to that position. (Nickels, McHugh, and McHugh, 2002, p.207; Barnard and Nix, 1979, p. 3) Though, in order to ensure development of an organization planning is extremely important, but when it comes to execution of such planning, it cannot be done without proper utilization of the human resources or “key resource” of that organization. (Bramham, 2002, p. 2) A manager can chalk out about his future vision and how he can reach his destination but at the same time, if he does not receive support from the employees it will not be possible for him to reach that level. Strategic integration is the central goal of HRM. (Mabey, Skinner and Clark, 1998, p. 4) It is responsibility of the HRM department that in not only implement policies that would help the organization to reach its target at the same time makes the employees understand that in the longer run it will benefit them. “The HRM outcome goals are … a high employee commitment, high quality and high flexible staff.” (Schuler and Jackson, 2007, p. 163) In the modern day management scenario, decision making is not an isolated process but it includes all those people who are related to the organization, starting from the lowest level to the highest plain of managerial decision making. (Pinnington, Macklin and Campbell, 2007, p. 128) Thus, in the modern context the aspect of employee collectivism receives a great deal of importance from the managers and HRM department as well. According to Purcell, collectivism can be defined as the “extent to which the organisation recongnises the right of employees to have a say in those aspects of management decision making which concern them”. (Purcell; quoted in Clark, 1993, p. 178)       The trade union organizations and various other types of employee representative bodies operate as main machinery for collectivism. (Warde, 1982, p.113; Florence, 2003, p. 40) Despite the fact that “nature and role of trade unions varies from country to country” (Loosemore, Dainty, and Lingard, 2003, p. 119) but the collectivism process actually empowers the employees to participate actively in organization decision making. Collectivism is classified into two categories, participation level of the employees, whether it is high or low and the degree of legitimacy given to the collective organization by management to increase flexibility. (Locke, Kochan, and Piore, 1995, p. 362) In case of employee participation the level of participation can be classified in two ways, a) high level and b) low level. High level employee participation is observed in case of corporate houses. It has been observed that employees participate in high level decision making process when it comes to solving doubts related to factors, including, “co-determination”, “pension fund trustees,” and “employer-wide collective bargaining.” (Farnham, 2000, p. 38) On the other hand the low employee participation occur at departmental and workplace levels or among the workgroups. There are various degrees of management to tolerate “collectivism ranges from willing co-operation at one extreme, to grudging acceptance at the other.” (Fernham, 2000, p. 38) Now this broad aspect of employee collectivism depends to a great extent over the decision making by the HRM department of a particular company. If human resource department can use the strength of employee collectivism in a proper manner then it becomes easy for the company to reach its target position but on the other hand, if the human resource management of a company fails to handle the strength properly, it is never possible for it to reach its target destination.       The modern business and its management have sorted out various connections between collectivism and employee relations. In case of US owned companies deal with factors like collectivism and employee relationship from individualist management perspective. (Rigby, Smith and Lawlor, 1999, p. 66) On the other hand a common tendency has been observed among UK companies that they deal with the same issues from collectivist approach. Study of business management shows that individualism and collectivism contradict each other. Purcell has observed this incidence in some of the Japanese owned and British companies and in this context he has remarked, “Management styles operate along the tow dimensions and…action in one area, toward individualism, for example, is not necessarily associated with changes in collectivism scale.” (Purcell; quoted in Clark, 1993, p. 178) The individualist approach of treating the aspects like collectivism and employee relations is characterized with non unionism, which means there must not be any interference of the union into the affairs of the company.       On the contrary, companies that follow collectivist approach encourage in the formation of union and they expect that employee unions must come forward to covey desires and expectations of employees in decision making process of the company. Such approach is mostly observed among UK based companies. Hence, it can be said that, “an employer recognises trade unions for representational, consultative, negotiating or co-determination purposes is an critical and visible expression of management style and its approach to employee relations.” (Farnham, 38) The employee relations also include within its scope various aspects that are exclusively controlled by management of the company, such as, promotion, internal training and employee welfare. But when it is seen that a company is refusing to accept existence of the union it implies that the management is shifting towards individualist style of approach rather than collective one.       In proper maintenance of employee relation, management of a company focuses over two critical issues that are also closely interwoven with each other, namely, the degree of discretion and the patterns of relations. The degree of discretion is used by the managers in making choice about aspects related with employee relations. After the managers execute the discretionary degrees, certain patterns emerge and those are considered as patterns of relation. For proper operation of a company there is a constant need of efficient people. It is not always possible for management of a big corporation to find out the right person, who suits for a particular role. Apart from this factor, a company comprises various patterns and in order to understand such pattern a company needs to understand the employees. The best way to understand such employee relation is to realize employee relationship of the organization and it can be done perfectly through the unions, if a company management is maintaining a close association with it. Thus, collectivism and employee relations both are very important for proper governance of a company.       Application of traditional approach towards the labor has been completely discouraged in case of both individualism and collectivism. In the traditional approach a labor is completely considered as an instrument of production and companies do not feel to make any investment to train a labor. In the same context, the managers so highly reluctant approach in providing recognition to the labor unions also. On the contrary, collectivism demands attention of the company to every individual labor. At the same time “great attention is paid to regulating employment conditions through negotiations with trade unions. Employment policies center on the need for stability, control and institutionalization of conflict.” (Mabey, Salaman and Storey, 1998, p. 289) The consultative style is a much advanced process, where there is always an attempt to choose between individualism and collectivism. Under this system unions receive recognition from managers, who consult with the union representatives over various aspects of business and attempt to churn opinion of employees in case of company affairs. In the recent times a completely modernist approach is followed, which is known as the sophisticated human relations. In this case a company provides highest attention to every individual employee but they do not provide any attention to the collectivism. Such approach is characterized with various features including, ‘internal labor market strategies, promotion and career ladders, employee appraisal, and extensive communication’ (Mabey, Salaman and Storey, 1998, p.289). Sole goal behind implementation of such policies is to instill loyalty of the employees.       If we study the history of collectivism or collective bargaining, two aspects become clear to us. First, the dynamic nature of collective bargaining and second, affinity towards opting for strike has reduced to a great extent. The pace and form of collectivism has changed drastically in the past, depending over the degree of demand. The degree of demand varies in terms of level in various places of work and number of issue that is covered under such collective demand. With the change is current degree of demand as well as number of areas covered by such demand, the collectivism will change its current form in future. The second important aspect is reduction in the rate of strike. The end of 19th and beginning of the 20th century witnessed heavy rate of strike that almost paralyzed the companies, especially the private ones. Later on recurrence of such strike has reduced to a great extent and the private sector has been benefited by it to a great extent. Such lessening has happened as “the effectiveness of strike is largely dictated by whether the sphere of trade union organisation encompasses the sphere of product market competition. Otherwise an effective strike jeopardises the strikers’ jobs.” (Barnard, Deakin, Hepple and Morris, 2004, p. 70)       Since the latter half of the 1940s until 1979, the ideology of liberal collectivism dominated the labor political scenario of United Kingdom. In the year 1979 the conservative government gained back its power into the political scenario of the nation. Since that time onwards the government started to decline over the process of liberalized process of persuasion from individualist point of view. Since its emergence the process of liberal collectivism “had underpinned the post-war consensus that had facilitated the emergence and development of a system of industrial relations at the core of which was free collective bargaining and which was known as voluntarism.” (Leat, 2007, p. 164) The voluntary system is known as “a system of industrial self-government” and it is completely founded over the autonomous activity of the company on mutual grounds. Key features of such system are a) that it would cover a section of general desire regarding various issues that mainly focus over wages as well as terms and conditions regarding employment norms, b) that parties and unions would have the discretion to determine over such issues “through the process of free or voluntary collective bargaining” (Leat, 2007, p. 164) and c) regulations implemented by the State can be reviewed and those aspects will “not be legally binding except in as much as they constituted terms in the individual employment contract.” (Leat, 2007, p. 164) Most of the developed nations in terms of their labor policies and employee relations do not follow such regulations as it has been followed by the United Kingdom government.       In contradiction to the liberal individualist approach, the liberal collectivism believes in the reality that bargaining power between the individuals in the society cannot be equal, though it believes in same line with liberalist individualist that market and private ownership both are highly important factors. At the same time it also believes that certain part of the total labor force as well as industry must be protected and at the same time regulated in such a way that all are equally benefited. It is important for the government to take such steps in order to ensure the national interest factor.       Every company or corporation follow certain policies in case of employee relations. These policies are true mirrors that reflect objectives and intentions of an employer regarding employment and human resource related matters. These policies also determine the actual way of conveyance of such matters to “managers, employees, the wider community, and where they are recognised, to trade unions and their representatives.” (Fernham, 2000, p. 39) If an attempt is made to definite the employee relations policies, it can be said that “the employee relations policies are an amalgam of explicit written statements and implicit unwritten assumptions about how employees are to be treated and managed as individuals and as members of trade unions.” (Fernham, 2000, p. 39) These policies are exclusively determined according to the nature of organization and at the same time they are also determined by different kinds of aspects, related to matters that are externally or internally related to the affairs of the company.       If these external and internal affairs change from time to time, policies of the company related to employee relations also change accordingly. Approach of the managerial body of a company plays a vital role in determining employee relations policies of an organization. The employee relations policies depend over various aspects including, legislative norms, policies made by other employers, location, ownership and size of the organization, power of the union, encouraging ‘good practices’ by employees, public policy, HR strategy, focus over business strategy of a company and proper execution of such strategies. When it comes to choice of policies, management of a company focuses over four options. First, Adoption of the worker subordination is an important option in the hands of the management. This policy focuses over individualism and collectivism at a lower degree, while the employees also receive a great deal of discretion from the management. Employee relations policy is operated through firm management control and management prerogative or “the right to manage” (Farnham, 2000, p. 39).       Apart from this primary reason, there are several other issues that have become essential parts of the HRM departments of the UK based companies, such as, the Union Incorporation policy is often adopted by the companies. In this option, there is also fusion of individualism and collectivism but collectivism receives higher preference in policy making, while individualism receives lower priority. In this case policy making is oriented by collaborative effort from management and union of a company. In certain limited conditions the Employee Commitment policy making is also adopted by the modern companies. Under this option, the individualism factor receives highest importance. While making policy under the union incorporation method, HR management department as well as the employees of a company both participates equally in such functions. In addition to all these options, the worker participation policy has received highest attention from most of the United Kingdom based companies as it includes within its scope both individualism and collectivism at high degree of equal proportion. Though the worker participation policy has received highest degree of attention in the modern management scenario, but at the same time it needs to be remembered that it is completely up to the discretion of management of a company that can choose between wide range of policies related to employment relations for various group of labors or different policies at different times for same time of working group people. The employee relations policies are published in written format and those are conveyed to the workers by personnel belonging to highest managerial level of a company. These policies can be of both broad or narrow is scope and have the capacity to encompass a vast scope of area regarding their implementation. Certain procedures are followed while a company wishes to implement the policies and they essentially act as guidelines to proper implementation of managerial actions.       In the context of labor employment and maintaining a proper relationship with the HRM department of an organization the British trade unions play a very crucial part. Trade unions are widely known as organizations that represent employees to before the management of a company. While taking about roles and functions of the trade unions, it can be said in a concise way that, “They were formed to protect and advance their interests to their members against employers and members of other trade unions.” (Gennard, Judge, 2005, p. 26) In the context of United Kingdom, recruitment strategies vary from each other and those organizations wish to provide complete protection to the members especially from arbitrary actions of the employers as well as discriminatory policy formation of the government as well as other trade unions. These UK labor organizations deal with employees all over the nation as well as industries belonging to different industries. People belonging to any industry can be a part of such organizations, while their job is never regarded as criterion for their membership. In the United Kingdom there are several small size unions and they are registered under a very few numbers of large trade unions. These trade unions reflect various fields of activism, including categories of workers, jobs, industries and public as well as private sectors that are integral parts of the nation’s economy. The UK trade unions are characterized with certain features including, A) preference to reach the goals through industrial methods rather than political ways, B) dependence over principles but they are never orthodox. According to the demand of the situation they do make certain orientations on the grounds of their principles, C) more focus over job rather than class.       It is due to the role played by the labor organizations, that labor movement of United Kingdom has reached a new dimension. In the field of employee relations policies and collectivism, these organizations have helped employees to achieve their rights. Individualism is such an aspect that give an industrialist compete scope to enhance his level of profit and at the same time make him believe that the employee is just an instrument for execution of his work. It is collectivism that restrains a worker from being exploited from such arbitrary actions of the employer. Most of the developed nations generally do not follow the labor policy models has the United Kingdom. Thus, in all those nations, there are numerous such examples that an individual has been victimized due to arbitrary actions on part of the employer or management of a particular corporation or company. In case of the United Kingdom the rate is much less as the labor unions always come forward for protection of such employee. Thus, in order to achieve proper employee relations, an organization is required to implement its policies in such manner that it does not harm welfare of the employees and at the same time though the way of cultivating over the aspect of employee collectivism it is also required to ensure its benefit.                                          References 1. Beaumont, P. B. (1993) Human resource management, London: Sage 2. Bramham, J., 2002, Human Resource Planning, Andhra Pradesh: Orient Blackswan 3. Brown, L., Grundy, T., 2003, Value-based human resource strategy: developing your consultancy role, Oxford: Butterworth-Heinemann 4. Campbell, T., Macklin, R., Pinnington, A., 2007, Human resource management: ethics and employment, Oxford: Oxford University Press 5. Clark, J., 1993, Human resource management and technical change, New Delhi: SAGE 6. Engle, A. 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