The Era of Globalization - Term Paper Example

Running Head: Problems and Opportunities in Mid Size organizations Problems and Opportunities in Mid Size organizations for Human Resource Manager [Name of the Writer appears here] [Name of the Institution appears here] The size of the organization tends to influence its design. Organizations often become more mechanistic in structure as they increase in size. Since larger numbers of employees are more difficult to control, larger organizations generally require more formal policies, rules, and procedures to guide employees. Decision making, too, in larger organizations tends to be centralized at higher levels of the hierarchy. Although large mechanistic organizations may enjoy adequate performance, there is evidence that employees obtain greater satisfaction when working for smaller companies and in smaller departments (Wendell et. al., 1985). Present era is the era of globalization. Globalization is the process of expanding global preferences in cultural, environmental, political, social and economical issues. The key economic characteristic of globalization is the free movement of goods throughout the world (Schaeffer, 2003). It is necessary for anyone and everyone to think global in doing business in this global village. Diversity and Globalization in the new economy and the present business situation has produced a work force made up of people all around the world. They have different life experiences, perspectives, preferences, values and style. This diversity of work force is reshaping and rewriting the way of doing business. Globalization presents a series of challenges and opportunities for Small and mid sized organizations especially for their human resource managers. We will discuss some of these challenges and opportunities in this report. Multicultural organizations Every company has its own individuality in the market; this individuality or the isolated quality can be taken as its competitive advantage. Competitive advantage of the company is something on what company is far ahead from it competitors. Organizations having a diverse workforce are bound to have its impact on the effectiveness of the organization as well as on the career growth of an individual. One of the most important advantages of having a multicultural or diverse workforce is to attract the best available talent towards the organization. Such organization, which does not show any prejudice in recruiting, retaining and promoting the employees from diverse cultural and racial backgrounds easily gain competitive advantage and become able to sustain highest caliber of human resources (Adler, 1991). Different studies have proved that organizations having diverse workforce and multicultural environment usually display better problem solving ability (Adler, 1991). Due to their multicultural workforce such organizations are more capable to understand the problem with different perspectives, meanings and interpretations and hence have more capability to solve problems. Multicultural organizations are designed specifically to find, accept, and use new ideas and so they are more able to adapt change and show more organizational flexibility. Different studies depicted that women possess higher tolerance for ambiguity than men (Rotter & O’Connell, 1982), similarly bilingual people possess more cognitive flexibility than monolingual (Lambert, 1977). Thus diverse workforce is an asset for the organizations while adapting change. It can easily be summed up that having a diverse workforce and its proper management provides a number of advantages to the organizations. “Manage diversity well are more likely to gain competitive advantages, attain increased productivity from available human resources, and reduce the inter-group conflict cost” (Triandis, Kurowski, and Gelfand 1994, p. 775). But at the same time, too much diversity in the workforce may also cause ambiguity and confusion. Multicultural organizations sometimes find it difficult to reach to a single, unanimous decision because of the diversity in its workforce. Due to the presence of people from different cultural backgrounds, there is a chance of cultural clashes between the people of different cultures. There is also a chance that majority group members may create obstacles for minority group member to take full participation. If such clashes cannot be handled and managed by the leaders then the organization may suffer ineffectiveness, less productivity and absenteeism of the employees (Adler, 1991). If there is communication gap between a culturally diverse team then there is a chance that a homogenous group may outperform this culturally diverse group. Multicultural organizations require extensive trainings to overcome the communication barrier otherwise it will not perform up to their potential (Perkins, 1993). Managing Expatriates Importing management practices from one country to another requires certain precautions. The management practices to be imported into a country must be analyzed in terms of their applicability rather than simply imposing them on the employees. This trend of workforce diversity compelled human resource managers to adapt these changes with special recruiting programs targeted towards these groups and organizational changes to accommodate their needs. Day-care centers, special benefit packages and language training have all become the part of the inducements to employees. The human resource manager has to make some policies to ease the transition for their expatriates, which includes: Selecting the right people: The human resource manager has to keep in mind that some employees abroad have damaged both their company’s and their country’s image by conveying an attitude of cultural arrogance, which results when a person conveys the attitude that his or her own culture is superior to another’s. Some employees do not function well in a foreign environment. According to a research project by Pierre Haldemann, only the financial benefits are not a sufficient motivator for employees to take part in the international assignments. According to this research challenge is the best motivator for expatriation process, for 30.8% of the responders while 26.95% thought that the adventure of trying something new and different is most appealing. Only 3.85% of the respondents thought that monetary benefits are important for motivating them for international assignment (Haldemann, 1999). In the study conducted by Haldemann in which 26 expatriates were interviewed, it was concluded that 46.15% of the expatriates were selected for their Technical knowledge and merit, 15.4% were selected for being the most suitable person for the job, 11.5% were selected for having the capability to adapt, 7.7% were selected for having the ability to speak the language of the host country, 3.8% were selected for their managerial abilities, 3.8% were selected for their interpersonal skills and 19.25 were selected without any specific selection criteria. The best approach for Human resource Manager is to select the right people who should, of course, be competent in their specialty. In addition, people should be selected on the basis of their desire to work and live in a foreign culture. Allowing Orientation Visits: an employee’s adjustment to another country can be facilitated and apprehensions reduced if he or she can make one or more orientation visits to this country before actually assuming job responsibilities Spouse and Family Satisfaction: It has been noticed that the satisfaction and adjustment of the spouse and other family members of the expatriates in the host country plays an important role in the success or failure of an expatriate process. In a study, which was conducted by Mohr and Klein it has been found out that only 36% of the spouses feel that the level of adjustment into the host country helps to satisfy them (Mohr & Klein, 2002). Providing Training Opportunities: Training for employees selected to assume job responsibilities in foreign country is essential. But unfortunately, according to a study conducted by Brewster and Pickard, “The research that has been done shows, primarily, that little preparation takes place. Despite the importance of expatriate positions, the high costs associated with expatriation and the extensive and largely nonproductive "running-in" periods, it is still the case that most organizations provide no formal training for expatriation” (Brewster and Pickard, 1994). According to the researchers, “Key elements include the nature of the international operation, the relevant job, the extent of interaction with locals, motivation, the family, and language skills. One implication of these approaches is that formal courses may be just one way of meeting the need for preparation, and that other means, such as preparatory visits, informal briefings, shadowing, and overlaps may be more cost effective“(Bonache, Brewster and Suutari, 2001). Creating the Right rewards: In all competitive and good organizations, a normal employee of the company usually gets a package including basic salary, health insurance for employees and their families and employer pension contributions. But the people who work in a foreign environment, it is better to offer some extra. It is also appropriate to offer their shares to their most talented workers. The offering of shares may align the interests of the company and the employees by allocating the right to purchase equity, usually at a discount, at a set date in future Work –life balance of Working Mothers Many of the women left to devote more time to their families, some companies are experimenting with innovative programs that respond to family pressures and offer more flexibility for women. Many companies encourage women to take time for their children because it allows the company to retain valued employees. These employees may be given extended leave, flexible scheduling, or opportunities for job sharing and telecommunicating that enables them to raise a family. These managers come back to regular work when the children are older. However company policies vary greatly. Nevertheless, about one-half of the largest US companies now offer job protected unpaid leave to new mother. Only one-third of the small businesses have unpaid leave policies. For example, Mellon Bank allows women to work flexible hours, work at home and engage in job sharing. At Peat Marwick Mitchell, women can opt for a lighter client load and a less than 40 hours workweek for two to three years. Use of Part time employees: A growing trend in the recent years is the use of contingent workers, the temporary, part-time and leased employees, plus the self-employed. Some of the major types of position where part-time workers are in demand are clerical/ receptionists, secretarial/ word processing, accounting / financial, data processing and engineering. (Kirkpatrick, 1988) This trend helps the companies to obtain quality employees, and at the same time reduces excess employees costs, so that firms can remain competitive in global marketplace. This means employers will be making greater use of part-time employees, work schedules that allow employees to work other than the traditional hours during the day, employee leasing and temporary employees, as well as employees who work under contract only for specific hours and tasks, thereby allowing employers to get exactly what they need and avoiding the provision of offices and benefits on a full-time basis. Part-time employment in Australia: Like rest of the world, part-time employment, is also a growing trend in Australia for the last two to three decades. Statistics have shown that part-time employment rate was 15 percent in the year 1978-1979 which became 24 percent in 1994-1995. (Australian Bureau of Statistics, 1995) Although trend of part-time employment had been started in the decade of 70s but this trend took greater pace in the middle of 80s, or in 1986, to be more specific. Small firms are usually the main employers of part-time workers but now big companies also joined hands in this trend. According to Australian Bureau of Statistics, part-time workers and self-employed people jointly contributed to the 34.8 percent of total labor force of Australia. (Australian Bureau of Statistics, 1996) Some of the sectors, which have highest ratio of part-time employees, are the following: (National Institute of Labor Studies Inc., 1994] Name of Industry Percentage of Part-time employees Recreation, personal and other services 38 % Community Services 35% Wholesale and retail trade 33% Finance, property and business Services 22% Agriculture, Forestry, Fishing and Hunting 22% Reasons for increase in part-time employment: There are several reasons for increase in part-time employment trend in Australia. Firstly, part-time employment concept is very much compatible with the service sector, as there is a considerable growth in Service sector in Australia, so the number of part-time and self-employed people is also increased. Secondly, the desire of family women to participate in labor market also affects the number of part-time employees. Family women, especially mothers, want to be able to spend more time at home with their young children. That is why they prefer part-time or home based jobs. (Dawkins and Norris, 1995). It has been estimated that in August 1994, number of women part-time workers is more than men part-time workers in all sectors except transport and storage. Thirdly, individuals have a variety of personal interests, such as reading, writing, bicycling etc. that are difficult to pursue when a person is locked into a 9-to-5 job. A part time position, or temporary assignments obtained through agencies enable a fairly large segment of Australian society to meet with personal needs. Fourthly, Part-time employees cost lower than the full-time employees that is why they are more desirable for companies. Fifthly, and most importantly, technology plays an important role in the growth of part-time employment in place of full-time employment (Lewis, 1990). For example, in retailing sector many tasks are broken down into components and many of these components are automated. Now in the present era of electronic retailing, no one needs experienced sales personnel to sell the goods. Lastly, most of the stores and restaurants are remained open for 24 hours, this also increase the need of part-time employment. Retention of Employees: The process of retaining the employees is much more important than hiring the new employees. Most of the companies try their best not to lose the talent they already have. As discussed earlier pay is not the only motive to shift from one job to another. Research has shown that there are three important factors to stay with a particular company. These three factors are: 1. The career path with growth and development 2. Work which is enjoyable as well as challenging 3. Work is meaningful for a person and an organization Along with these three reasons the other important reasons for staying with a company are: 1. Being able to work with great people 2. Being an important part of a team 3. The boss is nice 4. Being recognized by the superiors for good work 5. Having a sense of control or autonomy 6. Having flexible hours and no formal attire 7. Having fair pay and benefits Retention is necessary for getting optimized results. The responsibility of the Human resource department is to try at their utmost to retain their able and efficient employees. Following are some of the tactics for human resource department for retaining their employees: Meet with the employees monthly or more often to address and understand their concerns and reinforce exceptional performance Review job expectations and career development opportunities continuously with the employees. It is a good practice to ask the employees what they need to stay with the company and try to accommodate them Develop a system to measure the employee satisfaction on regular basis Conduct random and planned interviews with the employees to figure out how they feel about their immediate bosses Use training to address weaknesses in managers styles identified through surveys and interviews Align and tie manager’s compensation to retention rates Create and develop a program to identify bad management Transfer poor managers from their managerial jobs If a company develops a program to use the above-mentioned points to retain their employees, it will really help to optimize its business. Conclusion: The world is shrinking rapidly with the advent of faster communication, transportation, and financial flows. Products developed in one country are finding enthusiastic acceptance in other countries. The domains of business now cover the entire planet, where stock markets, fax machines, Internet, Televisions intermingle across national boundaries. The world of commerce is becoming wired like an integrated circuit, with no nation left out of the loop. Over the next few years, new forces are going to shape managerial careers. Many challenges and opportunities, which we have discussed in this report arises in the present globalization era. Managers have to rely heavily on human skills and conceptual skills, but they apply them in new ways as mentioned in this report. References Adler, N. J. (1991). International Dimensions of Organizational Behavior. 2d ed. Boston: Kent. Australian Bureau of Statistics (1996). Small Business in Australia, 1995. Catalogue No.1321.0. AGPS, Canberra. Australian Bureau of Statistics (1995). The labor Force, Australia. Catalogue No. 6203.0, AGPS, Canberra. Bonache, Jaime, Brewster, Chris and Suutari, Vesa. (2001- January- February). 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