Globalisation has come with the benefits of a wider market for commodities, cheaper operational costs, technological applications and promotion of information and ideas. However, even with these benefits, it also posits substantive challenges to management of the multinationals. In human resource management, globalisation has occasioned a number of changes and principles that have arisen in a bid to enable a convergence of diversity that resonate around cultural, economic, technological, political and legal factors. This paper examines the influence of globalisation on human resource management and the related changes it has occasioned. The paper goes to detail to examine the place of culture, technology and legal regimes in human resource management in relation to the international context. It also examines issues like organizational structure and design, principles and modes of management such as centralisation and decentralisation and the effect globalisation has on the same. Finally, the paper advocates for the application of a multicultural dimension to management of human resources as uses the Nissan Renault example steered by Ghosn to illustrate the position of culture in human resource management in the context of globalisation.
Globalisation refers to the emergence in international trade and operations in which companies are looking outside their native countries and exploiting the opportunity to establish foreign bases in foreign jurisdictions. Indeed, in globalisation, there are salient features that facilitate these establishments. Some of the features include; a good domestic law in the foreign regimes, competitive advantages derived from location in the foreign locations, conducive environmental conditions and a ready target market. A good example of a market can be cited of the Chinese market premised on the fact that the total population is over two billion. However, even with the adoption of globalisation management and business owners have had to deal with some teething and constraining challenges in relation to the management of human resources. This paper will canvass the topic giving the perspective of how globalisation is influencing human resource management.
Human resource management entails the process in which employees are guided, lead, controlled, regulated and steered towards the achievement of the overall business objectives. Ordinarily, managers use different school of thoughts in addressing their managerial concerns. However, the place and influence of one’s environment cannot be overlooked in management of human resource. Generally, managers are affected and influenced by the cultural practises, organisational cultures, employee attitudes and overall social dictates of the society in which it operates in. Going by this narrative, the management of across the globe is set to face some conflict in terms of the approach in utility. Chances are that what is applied in country A may not be consistent with the application in country B. This would happen despite the fact that both branches are managed by the same management. In addition, in this era of globalisation, multinationals have assumed a different approach in management. While others have adopted a decentralised organisational structure, others have retained centralised systems. It should be noted that under the latter, the management is primarily carried out from the headquarters with branches merely implementing instructions as received from the headquarters. This poses a huge managerial challenge in cases where the branches are located across the globe in different countries.
On the other hand, the former may confer decentralised elements to the external branches but post managers from different cultural setups or equally insist that the applied managerial principles remain in consonance with the headquarter principles. This would equally posit huge managerial inconveniences and influences on management. Other than the managerial structure, it is essential to be alive to the following challenges as well: multicultural dimensions and cultural conflicts, business practises, environmental concerns, technological applications and attendant technological gaps, employment legal regimes in the different countries, among other factors. Taking the above considerations, it is possible to navigate the discourse on the how globalisation influences human management.
First, it is important to appreciate the cultural gap introduced by the multicultural practises. This gap has a twofold aspect. The first gap lies in the managerial and organisational structures. Different countries where the branches are located have different organisational designs, structures and applications within managerial contexts. However, the parent organisation may want to apply their own organisational structure derived from the headquarters. It is essential for a compromise to be reached between the conflict in organisational structures and designs. Scholars have observed that generally, employees are reluctant to change. In addition, employees tend to have a preference for what they believe arises from their own cultures. Human resource management would consequently need to be addressed cautiously in light of these outstanding circumstances. Often, it is incumbent upon the management and especially the portion of management assigned to the foreign branch to strike a compromise that both addresses the headquarter concerns while at the same time appear to take note of the desires and inclination of the local employees.
The second limb relates to the social practices in the domestic localities. It would be prudent for the management to inform their policies drawing from the local expectations and cultural practises. This approach enables the adoption of the branch within the domestic locality without being tagged and marked as foreign. The consequence of a foreign tag on any maybe detrimental to its operations and success. Consequently, it may affect an organization in terms of sales, employee turnover and relationship to the community. In attempts to bridge this gap and mitigate the threat of isolation, it would be in the interest of the management to yet again compromise the managerial structure and the overall organisation design in consonance to what the external community expects of them.
In globalisation, the multicultural factors can be the breaker or the maker of organizations. Culture plays a fundamental role in the successful dispensation of organizational objectives. It is essential for the management to be conscious of diverse cultural beliefs and practises. From a human resource point of view, it ought to be appreciated that the culture of the employee would be inevitably different. In addition, it is also essential for the management to realise that culture plays a big role in employee output, beliefs, motivation and determination. An employee who views the company has receptive of his cultural practises would be loyal and more productive to the company as compared as an employee who holds the opinion that the company is condescending of his culture. The productivity of employees generally is attributable to the positivity or negativity in the perception of the employee at an individual level.
Perhaps to make this more illustrative is to break down in a brief case study. When Nissan of Japan was merged with Renault of France, Ghosn was sent to manage the Japanese company. Ghosn was French and had inherent French managerial beliefs and practises. In fact, on arrival at Nissan, Ghosn was confronted with the need to make the Japanese abandon their managerial style and in place adopt the Renault practise. However, Ghosn was pretty conscious of employee attitudes on cultural practises of management. This led Ghosn to adopt an approach that was accommodative and respectful of the Japanese cultures but blended with the overall objectives of the management. While this assignment was tough for Ghosn, it has served as an example where multicultural applications can be utilised in the organisational structures with success. For human recourse management, the message from Ghosn’s experience was clear. This was the fact that culture could not be overlooked and replaced overnight just because the shareholding has changed. As long as a company maintains a domestic presence in a foreign land, the human recourse management must be cognisant of the foreign practises and so imbue the elements in a reconciling way to the overall business objective.
Finally, globalisation has compelled human resource management to be alive to technological and legal regimes in countries of their operations. This is because due to the differences in development, the countries to not have the same technological and legal infrastructure. What this portends for human resource management is that a discriminative organisational structure and design has to be entertained in respect of the different regimes. Consequently, human resource management ideologues and structures have been designed in appreciation of the technological capacities and the employment laws and policy requirements. For example, in performance evaluation and employee supervision, in the United States where technological application near one hundred percent, the evaluation has applied the management by agreement approach where employees sit with the management and agree on a set of objectives. These objectives are then evaluated using scientific models. The feedback is also collected and analysed using scientific models and competitive analytics. This is made possible by the robust technological application. This can be contrasted to a third world country say Djibouti where technological applications are merely above average. In these countries, the performance evaluation and the appraisal would be more manual and based on the old concepts of management. This would be partly because the technological regime cannot facilitate the scientific models of performance evaluation. Consider the legal regimes in various countries. In United States, for instance, there are a body of laws that require a stringent set of conditions such as a minimum wage bill, insurance cover, and maximum working hours, among others. This necessitates a difference human resource management approach as compared to countries where the body of legal infrastructure is still at its nascent stage to the extent that employees do not have favourable bargaining power as to work conditions, wages, among others.
Davenport, T. H. (2006, January). Competing on Analytics. Havard Business Review, 84(1), 98-107.
Deresky, H. (2013). International Management: Managing Across Borders and Cultures, Text and Cases. New York: Pearson College Division.
Jennings, M. M. (2010). Business:Its Legal, Ethical, and Global Environment. New York: Cengage Learning.
Magee, D. (2010). Turnaround: How Carlos Ghosn Rescued Nissan. New York: HarperCollins.