Labor Market and Globalization - Research Paper Example

Introduction Globalization is the reality of today’s economy. Globalization means that the borders between countries are lessened. Therefore, countries have open trade with one another, countries invest in industries in other countries, and jobs are increasingly sent overseas where labour is cheaper. Because globalization is such a reality, management development must keep up with the changes and challenges that are posed by globalization. One of the biggest challenges are cultural challenges. With globalization comes more multiculturalism in the workplace, and also it might mean that the management themselves would end up going overseas. The fact is that every culture in different countries have differences from one another. At the risk of stereotyping, some cultures are more traditional – they are more masculine, less inclined to accept individual differences, and more respecting of hierarchies. These societies have basic inequalities. Other cultures are the opposite of this. Some cultures are individualist, and some are collectivist. Management must know these cultural differences, and they must have the skills to overcome the differences. They also should have a pragmatic way of dealing with the differences. Moreover, there is also the issue of outsourcing. This is another implication of globalization. When this occurs, there is inevitably a challenge. The employees may feel that they are going to be next, and the atmosphere may be poisonous. A good manager must have a way of overcoming this. To this end, manager developmental models may be pinpointed to problems or management developmental models may be broader-based. There should be a combination of both types of training, for optimal effect. Competency-based training is more broad-based, giving skills that transcend different situations. Assessment and development centres give pinpointed advice and training for certain situations. Another model is the multi-rater feedback. This means that there is assessment from the people who know the manager best, and the manager also does a self-assessment. These different models have different implications for the globalization challenges, but when used in conjunction with one another, especially the competency-based model with the assessment and development centre model, the manager would have the best training possible to deal with globalization challenges. This paper will outline the management development models. Then it will be talk about globalization, explaining it, and explaining what the challenges with regards to globalization. How management models interact with these challenges is also a focus of this analysis. Management Development and Learning Development Sadler-Smith (2012) states that learning development is an essential component of management development. Learning development is the process of acquiring skills which are necessary for success in a given field. In this case, the field is management development. Learning is different from training. Training is typically limited to a discrete event, whereas learning is ongoing. With training, there is a set goal from what is to be learned. With learning, there is not a set goal, as the learning process is ever-evolving. Development is more of a higher order of learning. With development, learning processes are combined with real-world experiences, and can be combined with training. Therefore, management development refers to the process of formal learning and training, combined with real-world experiences, that leads to success in management. Just like with training verses learning, there is a similar dichotomy between manager development and management development. Manager refers to a micromanagement level, and is centered around the individual and the role. In other words, like with training, it is more discrete than broad. Management, however, refers to macromanagement, and is not concerned with discrete tasks so much as it is concerned with a broad-based process or a set of social relationships. With manager training, the emphasis is on teaching the manager trainee a set of skills that are specific and would translate to a certain task. With management training, the emphasis is on acquiring skills that would translate to overall organizational functioning (Sadler-Smith, 2012). As such, management development is more broad-based than manager development. In management development, there are any number of competencies that the manager must learn. Included in this would be personal development, socialization development, organizational change. A manager also has to have skills that encompass the what and the how of the organization. The “what” skills means that the managers need to have skills in leading, organizing, and planning. The “how” skills are broader-based, and these skills may be interpersonal, informational or decisional (Sadler-Smith, 2012). Management development may take a variety of forms, and there are different models and theories regarding management development. One such form is known as the multi-rater feedback. This is where the management development trainee receives feedback from those who are working closest to them. For instance, one’s boss, peers and even suppliers may give feedback to the manager. The feedback from the outside sources are combined with self-ratings, so that the ratings and feedback are 180°, or even 360°. However, there is a major drawback to this, which is that peers might have problems in assessing the manager because they fear that it would strain the working relationships. Another problem would be somehow linking the performance evaluation with rewards, in that the assessors would be more interested in obtaining the rewards then in giving an honest assessment (Smith-Sadler, 2012). Management trainees may also make use of an assessment and development centre. In these centres, what is needed for a certain task is identified, and the management trainee is assessed for his or her ability with regards to that task, or the management trainee is developed so that he or she would be able to complete this task in an efficient way. The management trainee may also do a series of exercises that is designed to strengthen their competency, or may be trained by a professional that is trained in the task itself (Smith-Sadler, 2012). This is more of a manager training than a management training. For management training, there is the competency-based approach. As opposed to the assessment and development centres, which focuses more on discrete skills and competencies, the competency-based approach focuses on more broad skills. For instance, the competency-based approach may look at the knowledge, skills, attitudes, beliefs and traits that are necessary for effective management (Smith-Sadler, 2012). Mentoring is one way that a manager may gain competency. In mentoring, a senior member of the organization shows the junior members the ropes. They establish a relationship, and provide guidance and support to the junior member. In addition to providing a role model, and establishing a rapport with the mentee, so that knowledge is passed on from one to the other, the mentor also provides coaching for tasks, and may sponsor the mentee in these tasks (Smith-Sadler, 2012). Leadership is another issue that is distinct from management. Leaders have a variety of characteristics. As far as group leadership goes, there are certain traits that leaders should possess. The leadership types are servant, transformational and democratic. The servant leader is the altruistic type of leader. His or her interests and needs take a back seat to the needs and interests of the led. They are effective because they are able to provide a type of emotional balm for the followers who fail. Moreover, they have a solution to any type of problems that are presented, because they are wise. They are also very persuasive, and are able to understand how the organization is tied to society and how it impacts society. Because of this, they are able to see how the organization may be used as a force for good (Barbuto & Gifford, 2010, p. 5-7). The transformational leader is another type of leader, and they are known for their ability to extract a high level of performance from his or her followers, beyond what the leader and the follower would expect (Thomas, 2010, p. 9). Like the servant leader, the transformational leaders is interested in the needs of the led. The transformational leader is also marked by creativity and innovation, and the followers are encouraged to also think creative and innovatively. The transformational leader is especially effective in situations where there is seemingly an impossible task. These leaders are also known for their charisma, which inspires admiration from their followers (Thomas, 2010). The third type of leadership is the democratic leadership. A democratic leader is effective because they are essentially collaborators. They want input from others, so they facilitate this. They understand that different views are necessary to make an organization stronger, so they encourage these views and encourage debate on these views. Then, the disparate views may be amalgamated and a consensus is built. Democratic leaders are effective because they use the many talents of the organizational members. These leaders are most effective when their teams are comprised of individuals who are talented, bright and professional (Eagly & Johnson, 1990). Globalization The markets and economy is globalized, which means that there are no national borders for markets. The financial markets and world trade are integrated (Czenter, 2002). Direct investment from one country to another country is a hallmark of globalization. So is free trade with one country to another country. In essence, globalization means that each country lessens their boundaries and borders (O’Riain, 2000). Globalization may be accomplished through integrating world markets through production and trade. It may also be accomplished through foreign investments and capital. A third way of globalization is not focused upon economics, but upon relations. This is where different states influence one another through state interaction and through the influence of actors who are transnational (O’Riain, 2000, p. 3). At the basis of globalization are the multinational companies (Ostry, 2005). Management development faces challenges in the face of globalization. One of the largest issues are cultural issues, therefore this will form the bulk of the analysis and critique. Management development should center around cultural issues and how to overcome these issues, whether it is management training or manager training. For the manager training, which is more focused upon discrete tasks and situations, there should be cultural training that would focus upon certain situations that the manager trainee might find overseas. For instance, the training might state that, in Saudi Arabia, the nation observes the laws of Islam, and the training might focus upon what this might mean. However, for management training, which is more holistic and more focused upon broad competencies, the training should consist of learning about broad cultural differences and about broad cultural types. Hofstede’s cultural dimensions would be very helpful in this regard (Steenkamp, 1999). One of these dimensions is individualism verses collectivism. Some countries are more individualistic, while other countries are more collective. With indidualistic cultures, the individuals are recognized more than the collective, and each person is expected to sink or swim on one’s own. With collective cultures, there is a recognition that everybody is in it together, so to speak. People are seen as being a member of a group, and this group, whether it is a family, an organization, or a clan, and the loyalty is from the individuals to the (Hofstede, 1984, p. 84). In the individualistic cultures, the individual is higher in esteem than the group, and that individual’s concerns are more important than the group. In collectivistic cultures, the opposite is true (Steenkamp, 1999, p. 59). Therefore, the management development must include this dimension of culture. They should understand the specifics of how individuals in each kind of culture behave, because this would explain the behavior of the individuals. Moreover, it would help the manager to understand how to interact with the employees of each kind of culture. As for the specific models and theories regarding management development, the multi-rater feedback would be very effective for this. The reason for this is that the management gets feedback from their team, and this feedback can be very helpful if the management team is from a different culture then the manager, if this feedback is geared towards bridging the cultural differences. The assessment and development approach may also be helpful in this regard, in that this gives pragmatic pointers on how to navigate a certain situation. This would mean that the manager will get pinpointed advice on how to react in situations involving collective cultures or individualistic cultures. The competency-based approach, with its focus on more broad-based training, would do well in that it presumably, in this case, would give the manager broad cultural information. However, in this case, managers would do well to receive pragmatic advice alongside the more theoretical information that managers would receive in this model. What this model would do in this case would enable the manager to have the information about collectivistic verses individualistic cultures, but without the information on how to bridge this gap, this information would be virtually useless. Power distance is another element of cultural differences. Some countries respect hierarchies more than others. The smaller the power distance, the less the hierarchies are respected. The larger the power distance, the more the hierarchies are respected. When a power distance is large, authority is not questioned and it is harder to move within the hierarchy. When a country has a small power distance, there is more of an emphasis on egalitarianism and equality. Unlike with the countries with larger power distances, in countries with small power distances, any kind of inequality must have a reason. In countries with larger power distances, the lack of equality just is, and is accepted by the hierarchy members (Hofstede, 1984, p. 83). One can see the differences in power distance by examining families. In countries with larger power distances, the parents have power over the children, and the children are expected just to obey. In countries with larger power distances, the children are given the license to have their own minds and have their own initiative (Hofstede & McCrae, 2004). How this implicates management development is that the training would focus upon making the leader either a democratic leader or autocratic leader, depending upon the kind of country is the focus. Specifically, in a country with a smaller power distance, a democratic leader would be more appropriate than other kinds of leaders. This is because the democratic leader is focused upon collaboration and equality. This is not the case with transformational or autocratic leaders. In these kind of leadership models, the leader has a stronger position than in the democratic leadership model. There is less equality in these models. Moreover, there would also be a question as to whether the multi-rater feedback would be appropriate. In countries with smaller power distance, where there is more equality and less hierarchy, the multi-rater feedback would be appropriate. In this country, there is less power distance between all the members of the hierarchy, so there would be less reason to be less than truthful on these assessments. However, in countries with larger power distances, this might be the case. Since the hierarchies are more solid, and the leadership is less questioned, the members of the team might have more problems in criticizing this leader. Cultures are also different by how they tolerate uncertainties and differences. In some countries, the countries where uncertainty avoidance is strong, deviancies from the norm are less accepted than in countries with weak uncertainty avoidance. Moreover, in these countries, the beliefs are rigid and strong. This is the opposite in countries that have weak uncertainty avoidance. In these countries, deviancies are more accepted. People do not have to conform as much in these cultures, and there is a relaxed belief code (Hofstede, 1984). Management development models would have to adapt to this, as well. In looking at the leadership models, it is obvious that certain leadership models would work well in countries with strong uncertainty avoidance verses weak uncertainty avoidance. Just like with the hierarchical aspect of cultural differences, the implication regarding the uncertainty avoidance models is that the stronger the uncertainty the avoidance, the more traditional that society is. A traditional society would most likely accept a stronger leadership, such as a transformational leader. On the other hand, in societies which are less traditional, therefore has less uncertainty avoidance, more democratic leadership models would be appropriate. Democratic leadership models celebrate differences between team members, as these differences are amalgamated and the ideas of the disparate team members are welcomed and integrated. Likewise, the multi-rated feedback would be more appropriate in less traditional societies which have less uncertainty avoidance. In traditional societies that disparage differences, it might be difficult to get accurate feedback. This is because the differences of the leader, in the eyes of the follower, would inevitably looked at as a negative, even though it might not be, objectively, a negative. This would be the opposite with countries that have less uncertainty avoidance. The differences of the leader would not necessarily be considered a negative, but would be either neutral or a positive. This would mean that the feedback would be more accurate. Another cultural aspect that must be examined is masculinity verses femininity. Some cultures are feminine cultures, in that the women in these cultures are more equal to men, in comparison to masculine cultures. In these countries, the women are in the workforce, alongside the men, and the women are also educated and independent. In masculine countries, women are more submissive and men are more dominant. Women are also less likely to have equality in the workforce, or even be in the workforce with the men (Hofstede, 1984, p. 85). This has very clear implication upon the leadership and management models that would be used in these countries. Autocratic leadership and transformational leadership, which has strong leaders and the followers are less strong, would be appropriate for the masculine cultures. Moreover, these leaders probably would be men. Democratic and servant leaders, with the democratic leadership emphasizing equality, and the servant leaders emphasizing altruism and emotional bonding, would be appropriate in feminine cultures. As for the management development models, the multi-rater feedback model would be appropriate in some countries, and the mentorship model would be appropriate in other countries. In masculine countries, which are less democratic with regards to women, the feedback might not be accurate if the manager is a woman. However, in feminine countries, this would not necessarily be the case. Women are equal, so this would mean that there would be less likely to have inaccurate assessments from the underlings. Outsourcing Issues While cultural issues is one of the main issues that management must face because of globalization, there is also another issue that management must face. And that is that workers may lose their jobs through outsourcing to other countries. There are practical tips that management may learn that would help the transition for these workers. In this way, the assessment and development centres would be helpful, as these centres guide management through discrete tasks. The competency model would also be helpful, as there are also broader-based solutions to helping the transition for the employees whose jobs are outsourced. Reichers et al. (1997) proposes concrete steps that help alleviate some of the toxicity that occurs in workplaces that are outsourcing workers. Reichers et al. (1997) says that, when organizations are forced to outsource workers, there breeds a poisonous atmosphere for the workforce. The employees begin to feel less trust for their management and leadership. However, there are different things that management can do to help the employees transition in an atmosphere that could be poisonous. One of the steps that a management must take is that they must keep employees in the loop regarding the changes. Another way that Reichers et al. (1997) proposes to help this atmosphere, is to let the employees be able to help make the management decisions regarding the outsourcing. Communication is also a very important factor. Specifically, the management has to be able to talk to his or her team about the changes and explain why the changes are necessary. Employees are not to be blindsided, which is another piece of advice that Reichers et al. (1997) recommend. If outsourcing is going to be happening in the future, then management must level with the employees and warn them what is ahead. The outsourcing issue implicates different management and leadership models as well. Servant leaders would do well in situations where employees are facing layoffs due to outsourcing, as they are in tune with the emotions of their employees and are well-equipped to deal with the failure of their followers. Transformational leaders are also well-equipped to deal with these situations, as these are strong leaders and are known to lead organizations through tough times. They are charismatic and persuasive, as well as innovative, so they would be able to think outside the box and come up with solutions on how to deal with the fallout. Democratic leaders might also be a good leadership model in this situation, as democratic leaders are known for their excellent communication skill, and they are also likely to get the employees involved in the decision-making process. This was one step that was suggested by Reichers as being a good step towards easing the change. As for the other models, the management models, the competency based approach would be an excellent model to use. This is because the management who is dealing with a large change, such as outsourcing, should have broad-based skills that would help the management guide the employees through this change. The manager needs to have training on employee relations, psychology, social relations, etc. This could be in addition to the more targeted training that would help the manager know the exact steps that they need to take in order for the transition to be smoother. Conclusion Globalization will bring challenges to management. One such change is that managers may have to become culturally sensitive when dealing with employees from different countries, or if they, themselves, find themselves in a different country. They have to know that different countries have different beliefs and values, and that the differences in countries can be generalized as traditional verses non-traditional countries. Some countries are masculine, hierarchical and adverse to changes. Others are feminine, less hierarchical, and more open to changes. Employees may go through targeted training in the form of assessment and development centres, which would give specific pointers on how to navigate these changes. They may also go through competency training which would give them more broad-based skills in how to deal with the cultural differences that they might face. A combination of these models would be advisable. This would also be true for the other major obstacle that management might face, and that is that employees may end up in a workplace where outsourcing is happening, so employees are losing their jobs. This would mean that there would be fear that they are next, and there would also be cynicism among those left behind. This might mean that the workplace would become toxic. With the right leadership and the right training, however, this might not be the case. Once again, there should be a combination of pragmatic training that gives the management pinpointed advice on how to navigate the changes, with more broad-based competency training that gives management the broader skills in dealing with the changes. Bibliography Barbuto, J. & Gifford, G. (2010). “Examining gender differences of servant leadership.” Journal of Leadership Education, vol. 2, no.9, pp. 4-16. 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