The face of business has changed drastically in recent years. In the past, business was localized by necessity; businessmen need to be able to communicate quickly and efficiently with their employees, and in the past, physical proximity was necessary for this type of communication. However, with the growth of new technologies and the advent of the Internet Age, there are more and more opportunities for business to grow on a national, international, and even a transnational scale. Now that businesses with foresight and means can choose the best individual for whatever task that they need done regardless of the physical location of that individual, the very nature of business has changed.
A business based in Hong Kong, for example, can have production set in Shenzhen, China, with a team of marketing professionals in Singapore, and customer service in India. This is what Ashton et al. (2010) refer to as a “skill web.” It is the interconnection of qualified individuals across the globe, regardless of physical location, who have been hired for a specific job because they are the most qualified or the best economic choice for that task (Ashton et al., 2010). “Skill webs” are becoming the norm for businesses that are expanding into the global markets, but with this idea and new philosophy comes questions that must be answered.
Ashton et al. (2010) suggest that the job of human resources in the changing global economy-- or one of the new tasks, at least-- is to become proficient at creating and managing these skill webs. Ashton et al. (2010) write:
With the development of multinational (MNCs) and subsequently transnational corporations (TNCs), this approach transferred from the national to the international level in the areas of selection, recruitment, training and development, payment systems and industrial/employee relations firms ‘internationalize’ their business in response to the development of global markets. They see the internationalization of business resulting in the internationalization of staffing (finding the best and lowest cost employees anywhere in the world), executive development (ensuring the management group has the knowledge and ability to operate anywhere in the world), compensation (being globally competitive), and labour relations (which vary from country to country), thereby transforming HRM into IHRM. (Ashton et al., 2010).
What does this mean for human resources? It means that the job that human resources had before-- managing employees and employee relations at the business-- went from a local task to an international task. With this expansion comes unique challenges that the human resources professional must be aware of, so as to avoid the potential pitfalls of managing employees on an international level.
Ashton et al. (2010) also suggest that this new internationalization of skills allows companies to move their business interests about in such a way that they can maximize their profits while minimizing their losses over time. Ashton et al. (2010 write, “the concept of global skill webs refers to the shift from national to global sourcing of skills and talent human resources based on national pyramids of employees, functions, and trained capability, are being transformed into global webs indifferent to national, functional and organizational boundaries as sourcing options have dramatically increased, including the use of outsourcing and offshoring” (Ashton et al., 2010). The idea that corporate culture is moving away from a hierarchical structure to a more network or web-like structure is an interesting postulate, to be sure, but there are certainly issues with this contention.
Business, even business on a global scale, must be hierarchical in nature. Without someone to make categorical decisions, business would halt; with decision-making power comes the responsibility when things go wrong in business. In a network culture, no one will have to take responsibility, because at the end of the day, no one is responsible. Even if businesses maintain a rudimentary hierarchical structure, having sprawling networks of people around the globe can certainly turn into a logistical nightmare for human resources.
Ashton et al. (2010) also suggest that along with skills, knowledge production can be moved about the world based on the needs of the company and the skills that the company is looking for, insofar as knowledge and training is concerned. However, the reality is that knowledge innovation, a concept that Ashton et al. are very concerned with, is best done in a variety of different locations with a variety of different teams-- this is the way to achieve true innovation. A single team of individuals working on a problem may be able to solve a problem, but a variety of different teams may reach different solutions to the same problem based on differences in training and culture. Centralizing knowledge production is different from centralizing production of a good; because it requires innovation and creativity, it must be given more freedom.
Overall, Ashton et al. (2010) present a convincing case for the existence and use of skill webs by transnational corporations. The only area that they neglect is the area of culture: human resources individuals working with individuals across many different physical locations must be well-educated on how to be culturally sensitive. There are logistical problems as well, as human resources laws and regulations are different in different countries. This problem can be circumvented by hiring human resources personnel in every country where the skill web has a hub, but again, the more complex the network of employees becomes, the more difficult the logistical problems that may arise will be to solve.
Ashton, D. et al. (2010). Skill webs and international human resource management: lessons from a study of the global skill strategies of transnational companies. The International Journal of Human Resource Management, 26 (10).
Ulrich, D. (1997). Human resource champions: The next agenda for adding value and delivering results. Boston: Harvard Business School Press.