Hrm and globalization
Globalization refers to the tendency of investment funds and businesses to move beyond domestic and national markets to other markets around the globe, thereby increasing the interconnectedness of different markets. Globalization better said is the shift in the direction of a more incorporated and interdependent World economy. Globalization has had the effect of markedly increasing not only international trade, but also cultural exchange. some intellectual define globalization as convergence of prototypes of manufacture and expenditure and a consequential homogenization of customs, while others strain that globalization has the prospective to take countless miscellaneous appearances.
In economics, a wide description is that globalization is the union of prices, wages, products, profits and rates of interest in synchronization with developed nation norms. Globalization of the financial system depends on the position of international business, human migration, incorporation of pecuniary markets, and mobility of capital. The International Monetary Fund observes the increasing financial interdependence of countries all over the world through rising quantity and multiplicity of cross-border dealings, gratis international capital flow, and comparatively faster and extensive dissemination of technology. Theodore is more often than not attributed with globalization’s initial utilization in an economic perspective. (Dos, 441-442)
In contemporary economic scenario the prevailing trend is expansion in the global market. Global market expansion is nothing but a concept of serving customers beyond the limits of domestic market and in economic scenario considered a key growth strategy. Global market expansion is a business reality that every company encounters at some point in its evolution. Under such circumstances every business venture must balance risk with rewards, the risks when expanding internationally can be less predictable and in the same way the rewards can be more elusive. The companies, which are looking for sustainable ways to grow and diversify their revenue streams, consider global expansion as a strategic option. There are several factors behind the trend toward expansion in the global market. Companies require a global presence. For both offensive and defensive causes, companies cannot overlook opportunities outside their home markets. A company’s requirement for a global presence arises from two factors, their capability of leveraging domestic relationships outside their country and a requirement from domestic customers to support the company’s products internationally. A global expansion allows companies to replicate successful domestic strategies in international markets, potentially in markets with lower competitive intensity. Additionally Global market expansion provide the companies large untapped markets, advantages of low labor costs, savings of shipping costs, speed and efficiency of delivery system, etc. (Lamb, 243)
Global market expansion also takes into account the factors, which the companies have to keep in mind, such as legislation in home and host countries, need to stay ahead of the of the competition, stringent pollution laws, profuse experience to drive a global expansion. For succeeding in global market companies require approaches and skill-sets that are different from those required when expanding domestically. Companies must articulate their globalization objectives to understand the potentials that can be leveraged and those that need to be acquired. Companies need to develop a detailed business plan, identify target markets, size the market opportunities, execute the strategy and adapt and formulate entry strategies for each chosen market.
Companies must appoint leaders to drive their globalization efforts, adapt their internal structures, and measure progress toward their globalization objectives. To be successful in international markets companies need to take on careful research and risk analysis followed by the development of in-depth business and implementation strategies. Companies are required to understand their customers’ buying criteria as well as their expectations of product satisfaction and after-sales support. Companies are also required to acclimatize themselves to the regulatory, legal, and monetary requirements of foreign jurisdictions. Companies have to accustom their organizational structures to deal with global operations and management styles. They are also required to adapt to the demands of managing foreign-trained human resource bases. Capital needs must include the direct requirements of foreign subsidiaries and their resulting impact on processes in domestic operations. Internal departments will also have to adjust to the updated funding mechanisms for new projects. All of this can divert management attention and resources from the domestic activities that have contributed to a company’s success. Thus global expansion stresses companies in ways that can impact their home market success. (Lamb, 244-245)
The advantages and disadvantages of globalization have been heavily scrutinized and debated in recent years. Proponents of globalization say that it helps developing economies catch up to highly developed industrialized economies much faster through increased employment and technological advances. Critics of globalization argue that it weakens national sovereignty and allows rich nations to ship domestic jobs overseas where labor is much cheaper. The main advantages of globalization are as such, increased free trade between nations, increased liquidity of capital allowing investors in developed nations to invest in developing nations, conglomerates are having greater flexibility to operate across borders, global mass media binding the world together, increased flow of communications allowing vital information to be shared between individuals and conglomerates through out the globe, greater facility and speed of transportation for goods and people, reduction of cultural barriers increases the global village effect, spread of democratic ideals to developed nations, greater interdependence of nation-states, reduction of likelihood of war between developed nations , increases in environmental protection in developed nations. Along with the advantages there are also several disadvantages of globalization, such as increased flow of skilled and non-skilled jobs from developed to developing nations as companies look for the cheapest labor, increased probability of economic disturbances in one nation effecting all nations, business influence of nation-states far exceeds that of civil society organizations and average individuals, apprehension that control of world media by a handful of conglomerates will limit cultural expression, greater possibility of reactions for globalization being violent in an attempt to conserve cultural heritage, greater danger of diseases being transported inadvertently between nations, spread of a materialistic lifestyle and outlooks that sees consumption as the path to affluence, international bodies like the World Trade Organization interfere with national and individual sovereignty, increase in the probabilities of civil war within developing countries and open war between developing countries as they compete for resources, decrease in environmental integrity as polluting corporations take advantage of weak regulatory rules in developing countries, etc. (Dollard, 89-92)
The Human Resources Management (HRM) practices or policies emphasize the need for consensus and harmony in the relation between the employees and the management of a company for enhancement in production capacity and augmentation in overall output of the company. It suggests for provision of more comfortable and comparatively better working conditions to the employees in order to enhance their working capacity. Globalization provides that the individuals are to be trained and socialized by the organization, so that they can comprehend team culture and easily adopt it. Human Resource Management model has the utmost coverage in international point of view due to worldwide growth approaches, degree of delegation, organization’s dimension and requirement for deportee reimbursement etc. Due to globalization and accelerating competition in market, today organizations have to face tough time to survive. These conditions also affect human resource (HR) strategy and policies up to a great extent. Such an environment gives rise to organizational conflicts. Such as conflict of power verses moral values, which include raising standards of production along with humanizing the workplace, Managerial prerogatives with ownership policies such as system, reliability, hierarchy, uniformity etc conflict with sensitivity, responsiveness, interactive ness, novelty and sub optimization. (King, 126)
In this competition organizations are gradually loosing their ethnic values and morals. Today competence of an individual or a corporate is judged by his or her ability to cope up with constant fundamental changes in the organizational structure. All over the world, organizations aligning new products engineering teams around ‘pit crew’ model. Cross functional teams to design, manufacturing sales and service engineer’s work along with the workers, who at some point of time have stake in the product. This ensures manufacturing and sales people having their say all through the design process and building up the manufacturing capability early on that is currant engineering. The goals are simple, such as speed, equality and competitive price. Commodities have become international for most industries and the impact of engineering is significant. In many organizations, the learning curve in engineering has become an unaffordable luxury. Competitive pressures mandate finding ways to reduce the total time required to introduce new products in the market. Competition along with more complex production and distribution environments requires identifying and reducing necessary costs, such as costs associated with development, manufacturing, distribution and service. (Fletcher, 188)
Working conditions in some industries are very hazardous. The precipitation areas in industries have caustic vapors these cause skin problems. In some industries people work in fluoride environment .Continuous exposure to fluoride leads to a disease Fluoric in which bones and teeth are effected. In all these less attention is paid towards the interests of their workers, hence the relation between the management and the workers get seriously damage. Such circumstances account for greater need for application of Human Resources Management (HRM) in organizations. (Kar, 145)
In conclusion it should be noted that Globalization signifies escalating global connectivity, incorporation and interdependence in the economic, cultural, technological, social, ecological, and political orbs. Detractors of the economic issues of globalization challenge that it is not an unalterable procedure which flows logically from the economic requirements of every person, as its supporters naturally argue. Instead of all criticisms Globalization has come up with global harmony and cooperation, thus strengthening the nations to face perils with global support behind them.
Dos, M; Future of Thought Process in Financial History (Alliance Publications; 2005) pp 441-442
Dollard, John; Globalization: A look into Tomorrow. (New Haven and London: Yale University Press. 2006) pp 89-92
Fletcher, R; Beliefs and Knowledge: Believing and Knowing. (Howard ; Price. 2006) pp 188
Kar, P; Modern History of Trade, Industry and Commerce (Dasgupta ; Chatterjee 2005) pp 145
King, H; Fiscal Fitness Today (HBT ; Brooks Ltd. 2005) pp 126
Lamb, Davis; Cult to Culture: The Development of Civilization on the Strategic Strata. (National Book Trust. 2004) pp 243-245