Pros of Globalization to Business, Cultural Differences as Barrier to Progress in Globalized Biz - Case Study Example

Globalization and H.R.M Introduction: The modern times are driven by advances in terms of businesses and technology. In the wake of such advances, the outlook of businesses has undergone a change in its appearance. While Human Resource Management has been an integral part of organizational existence and work, yet the modern concepts of Global/ International Human Resource Management have been introduced as the innovative trends. These trends have their own set of parameters, limitations, benefits. In the light of this global scenario of H.R.M, different set of parameters and variables are taken into account which are usually ignored in the case of domestic and locally undertaken Human Resource Management schemes. Key words: Global H.R.M, off shore, cultural constraints, multinational corporations, cross continental operations. Objectives: This paper looks into the trends of the Global H.R.M, followed by the factors and variables that come along with such trends and concepts, in the later part of the paper an assessment of the positives and negatives of Global H.R.M methods is assessed as well. Two examples of practically globally operative organizations is also mentioned in the paper which allows understanding the realistic and actual situation surrounding such practices. This is supported by the questionnaire that is attached. The questionnaire consists of set of questions that are undertaken as a primary research source. Questionnaire: Question number 1: What do you understand by the concept of Globalization in businesses? Globalized businesses mean operating beyond borders and off shore activities. It is a term of modern times in businesses where multinational corporations operate in different parts of the world. Question number 2: What do you feel are the positives of Globalization of business? Expanded network, more exposure, increased productivity, increased demand, increased competition are few of the many positives of the concept of globalized businesses. Question 3: Do you feel the cultural differences may serve as barrier to progress in globalized businesses? Cultural differences serve as a constraint in the global businesses. They must be handled properly in order to ensure that they do not create any hurdles towards active participation in the organizational activities. Cross cultural meetings, interaction are few of the methods that can be used towards ensuring removal of the cultural barriers. Question number 4: Does globalization always mean success in terms of productivity? If the principles of Globalization are handled and undertaken in the proper manner, they can guarantee success nearly every time. Considering the fact that Globalized businesses include large number of stakeholders and investors, it thereby allows for more chances of productivity. Question number 5: How important is the factor of cross cultural understanding towards globalization? Without the handling of the cross cultural element, the businesses can be obstructed. Overcoming the cross cultural barriers allow for working in a proper manner with the members from different backgrounds and different affiliations. Question number 6: How important is the presence of effective communication channels in Globalized businesses? the presence of communication channels and communication system is ever so important. This is based on the fact that the most of activities of the Global H.R.M are performed with places that are off shore and in distant places, in order to maintain coherence and connection with the head offices, sub departments, supply chain networks and other branches, effective means of communication are needed. These means of communication come about in the form of video conferencing options, faxing services, telephone presence, internet digital modem facility and other state of the art technologies and systems. Question number 7: Do you agree Globalized businesses are the trends and concepts of future businesses? With ever advanced digital devices being incorporated into the business enterprises and business enterprises going global, the globalization of trends in business will see more encouragement and progress in terms of acceptance, understanding and the benefits enactment. Question number 8: What type of businesses do you feel can fetch more success if expanded in Global markets? The concept of Globalization and its benefits are not just limited to a single set of operations and enterprises. Almost all types of organizations and manufacturing industries can gain benefit through the incorporation of the globalized system enactment. Question number 9: What do you think are the reasons based on which organizations go Global? Aiming to reach out to bigger markets, aiming to maximize their profits, and further aiming to increase their presence in the different places are few of the reasons based on which the organizations and enterprises go global. Another reason why companies prefer global operations is the fact that more presence around allows for improved services, easy and fast access to the supply chain networks and other stakeholders. Reason for choosing questionnaire: Questionnaire allows for following a clearly defined path. With the ten most suitable and appropriate questions set forth at the start of the overall survey. The benefits of a questionnaire over an interview or any other form of research method is the fact that it prevents deviations from the core issues. With a set of questions prepared, the responders and their answers remain focused around the predefined set of areas to be asked about. Other forms of research: Case Study: One case study undertaken and observed for the purpose of understanding the benefits and overall concept of Globalization comes in the form of the telecom sector that went global couple of years ago. The off shore center so chosen was India- Delhi. The firm was basically a British telecommunication company that aimed at maximizing its reach to the different markets by going global and initiating its businesses. The company inducted over 4000 employees in different branches which came apart from the 1200 employees that were already functional and recruited in United Kingdom. Preferring direct employment: The company did not undertake the process of outsourcing. This was done based on the fact that there were possible repercussions attached to the outsourcing mechanism. Functions performed in the off shore activities in India and other parts of Europe: Sales support: Spare parts production: Engineering processes undertaking and handling: Banking support: Financial support system: Further aims are to induct and expand the employees bench by a number of 900 employees from India. The concept Global H.R.M and the Fresh Graduates: Fresh graduates who pass out from universities have many options in front of them. They can either start with Small Enterprises and Medium projects or they could go global. Since these students are familiar with the new techniques and processes, this allows them knowing and utilizing their skills in a more effective way towards the global businesses. Using their knowledge and the tools available, they can make maximum use of the global trends of businesses. With the Head office at one part of the world, the other decentralized entities are connected to the head offices and main offices. The methods of connection so adopted are obviously that of the digital devices. These digital devices have made it possible reaching out between the two nodes and terminals virtually in no time (Mello, 2014, 272). Hence the Global H.R.M trends are subject to number of variables and it can be safely said that there is no important and no effective agent than the digital technology that makes the Global Human Resource Management techniques and practices possible. Without the presence of such facilities and trends, the concept of Global Human Resource management could not be practically achieved. A set of advantages and considerations come into force as soon as the global H.R.M practices are undertaken. The following are few set of benefits and characteristics that define the entity of Global H.R.M. Cross Cultural existence: With the concept of Global H.R.M, an organization, its products, processes or other manufacturing elements are not just limited to one particular region, individuals, culture or society, rather it allows for accommodation of individuals from different backgrounds (Aswathappa, 2007). This allows for an easier accommodation within, along with more job opportunities. In the global context of the international businesses, it allows for more induction and increased labor opportunities in the different parts of the world. This in turn results in the reduction in the labor costs(Sims, 2007,71). Availability of the local skill makes it easy to coordinate the activities and this in turn leads to more effective outputs. The trade barriers are also believed to have a considerable impact upon the global businesses that takes place. Practical example: The concept of European Union and the overall expanded network of businesses enterprises, cross country trading ties and relationships are a practical example of Global Human Resource management practices (Harris, 2002). The benefits so enacted through this system include reduced tariffs, increased trading opportunities, increased economic development opportunities and maximized opportunities towards the employees’ empowerment and reduction in the unemployment rates. The European Trade entity has not only allowed for trade undertaking in the bi lateral terms and paradigm, but also across the continent of Europe and with the Asian partners. This is a broadly highlighted and clearly defined example of Global Human Resource Management services enactment. Apart from the E.U’s practices of common market and other associated terms, the United States of America undertook this experiment during the Vietnam War era and since then it has been experimented and practiced in the different industries of United States of America (Warner & Rowley, 2013, 48). Example of Barbie Doll: A global activity may not necessarily mean complete overhauling and manufacturing in one particular region. Rather it may entail part wise production of the pieces and items of a given product or service. One similar example that can be taken into account in this regard is that of the manufacturing of the children’s famous “Barbie Doll”. It serves as a prime example of how the global activities are undertaken. While Barbie Doll may appear to be a simple item, yet it is manufactured and prepared in more than three countries. The manufacturing process participants include United States of America, China, Indonesia and Malaysia in the different activities which even includes the Assembling process (McCarthy & Knox, 2014, 15). 2nd Example: The call centers going global: Call center concept has originally been known to have existed in the European sphere, however with the fast developing technological means and mechanism, this concept made its way to Asia and India, in India while this system was incorporated, there were number of problems that were countered during its processing activities. This was in terms of the geographical differences and other associated factors that were subject to differences between the cultures and geography of India and Great Britain. This serves as an example towards how the cultural constraint plays a vital role towards the effective operational conditioning of the global Human resource management activities (Sparrow, 2010, 15). Success stories: There are large numbers of practical examples where the global enterprises have taken to the different continents and different countries and in turn gained maximum profits. One prime example that stands in the field of the digital electronics and modern digital appliances is that of the Lenovo. Lenovo is amongst the front line product that is being demanded by the clients in America (Booth, 2013). Much to the surprise, it is a Chinese manufacturing idea that has been in America for over three decades now and has been running successfully. This is one of the best examples that can be followed in terms of the successes that may be achieved through the global businesses integration and incorporation. Pre requisites to Global H.R.M: While technology is one of the basic element and function that is vitally needed to be present in order to undertake and perform Global H.R.M activities, The V.P.Ns (Virtual Private Networks) is another system that have largely been implemented in the Global H.R.M systems. The purpose is to interconnect the sub branches with the head offices (Clayden, 2007). Other pre requisites to Global H.R.M include ability to take upon the multi cultural environments, allowing the individuals from different environments to incorporate their skills and work under the banner of a single entity. Government policies and overall political atmosphere: Political stability is a key function of the global Human Resource Management function. A political unstable region would distract the investors, companies and the enterprises. This in turn results in the expensive raw material availability along with the increased rates of the labors. Government policies are a similarly determining factor that plays an important role on the overall outfit of the function under taken. A business friendly government would find many more investors heading towards their country. The business friendly policies of a given government not only benefits the investors but also the overall economic health of a given region and country in particular. Cultural barriers and Language barriers: Overcoming the barriers that are posed in the form of language, manpower and cultural differences is a vital consideration that is to be taken into account while deciding about going global in operations. This brings about the need of the skilled employees who bear some familiarity with the cultures, language and society of the given place where the plants are being installed or the products or the services are being provided. Secondly, the cultural differences in terms of the overall aptitude, the cultural norms, taboos, dos and don’ts, folkways and mores all are to be taken into account while going global. It also must be kept in mind that the product or service so prepared and presented must not run contrary to the feelings of the people nor their sentiments or any religious or cultural values. All these factors need to be taken into account and failure to doing so could well amount to troubles and obstacles in the overall activities undertaken during the Global Human Resource functioning. Off shoring: Off shoring is another associated concept that nearly co relates to the Global H.R.M. it pertains to expanding the domain of business activities in the different countries. The aim and purpose of this function is to target the lesser progressive and less developed economies and markets. This is further targeted through the focus on cheap labor and cheap raw material. All other constraints and factors such as the cultural barriers and communication channels establishment are taken into account while adopting the off- shore policy of business operations. Taxes are another factor that mostly dominates the organizations decisions of exploring the regions that have been discovered to a lesser extent. This gives the investors a leverage with regard to the maximum investment opportunities and little government interference. Re-shoring: Failure on number of fronts has led to the companies thinking about the returning of the overall base and compound to the ground turf. This has been often done so on the account of failure to fulfills the needs of the people and the environment or possible lack of the ability to stay abreast with the challenges that come along with the new environments. Many major brands have taken up this policy in the last few years owing to their failure to maintain a brand name, success and profits in the foreign markets and industries. 21st century and Global H.R.M: In the 21st century business activities any company that desires to gain global status and recognition would go global. Those that have already settled themselves off shore, need to embrace themselves to the challenges and at the same time make use of the maximum amount of gains that are available through the effective functioning of the activities in the form of successful international businesses undertaking. References: Aswathappa, K., 2007. International Hrm. s.l.:Tata McGraw-Hill Education Booth, T., 2013. Here, there and everywhere, s.l.: The Economist Clayden, S. J., 2007. The Development of Trust in Virtual Teams: An Exploratory Examination of Communication Technologies. s.l.:ProQuest Harris, H., 2002. International HRM: A European Perspective. s.l.:Routledge McCarthy, L. & Knox, P., 2014. The Geography of the World Economy. 5th ed. s.l.:Routledge Mello, J., 2014. Strategic Human Resource Management. s.l.:Cengage Learning Sims, R. R., 2007. Human Resource Management: Contemporary Issues, Challenges, and Opportunities. s.l.:IAP Sparrow, P., 2010. Handbook of International Human Resource Management: Integrating People, Process, and Context. s.l.:John Wiley & Sons Warner, M. & Rowley, C., 2013. GLOBALIZING INTERN HUMAN RES MANAGE. s.l.:Routledge Read More