A Call for Flexible Human Resource Management Practice:
To Match Impact of Globalization


Dr. L.K. Tripathy
Professor & Director
Shivneri Institute of Business Management
Khanapur, Junnar, Pune-410502

The most critical determinant of an organisation's success in its global venture is the effective management of its human resources. The researcher, in this paper will make an attempt to highlight some of the major issues that the management faces regularly as it tries to manage human resources across the national boundaries.  Here, the entire focus will be on an overview of the issues on present global human resource management  theory and practice on the basis of the traditional Human Resource Management.

Human Resource Management has become the centre of attention in the organizational context due to the enormous transformations taking place in the social, political, economic and educational environments.  Expanding business operations beyond national boundaries while continuing commitments to the local markets requires more complex business structures.  The all time increasing significance of businesses providing information and services and also requirements for increased utilization of technology demands a well educated and trained work force, mobile in nature from the point of view of requirement of the world market.  In the process, geographic, national, cultural and ethnic boundaries get extended.  Hence, the effect of all these forces demand that employees in an organisation have to be necessarily capable of fast change and must be prepared for continuous learning and thus learning organisation evolves as a resultant of effective HRM.1

According to Zein 2  worldwide businesses evolve from 'international' to 'multinational' to 'global' organisations.  An international organisation transports its business outside of its own country replicating the domestic experience of its business operations.  A typical international organisation is structured geographically and involves subsidiary management staff.  As in contrast with this, a multinational company grows and defines its business on a worldwide basis but continues to allocate its resources among national or regional areas so as to maximize the total human resource capabilities.

This holds true only for the companies which have single line product.  But companies with multiple line products quite often find it difficult to remain geographically organized because of a number of reasons e.g. the need to have a common accounting system, common financial and management controls and inter-related marketing programmes.  As a consequence, such companies tend to evolve multinational structures with a balanced combination of product line and market line responsibilities.

In contrast with 'International Company' and 'Multinational Company', 'Global Organizations' treat the entire world as the extensions of the country of their origination.  The global organisation may spread all over the globe with all of its products line or with some of them.  Accordingly, their organizational structure gets determined comprising of various mutually co-related and influencing systems.  As per Campbell's observation there are five important components of functioning of a Global organisation.  They are as follows:

1.   Borderless structure and bottom-up decision making processes.  This encourages communication and information flow among all components of the company and extend the network to its key suppliers, distributors and other business partners.

2. Custodial leadership:  This emphasizes values and vision and is skillfully unassertive, while emerging and challenging middle managers with demanding targets.

3. Human Resource Management:  This includes socialization, training and promotion, by way of hierarchy of ranks, job rotation and appraisal systems that promote hard work, commitment, and competition among peers.

4. Incremental Planning and Control:  This helps a company expand in quantum, focussing on new products and the relentless pursuit of operating improvements.

5. An extended family model: This encourages and rewards commitment.3

A global organisation has to take into account all the above factors and then only will its human relations and improvement on human relations  take place.  Once the quality of human relations is enhanced and effectiveness of human resources will be maximized.  The above-cited practices generate broad working networks and an appreciation for total business needs horizontally and vertically throughout the organisation.  Thus, effective human resource management does not exist in a vacuum but must be related to the overall strategy of the organisation.  The human resource policies of the company and the personnel function itself must relate to the goals of the organisation.

In earlier days, multi-national firms and their human resource management practices were studied purely on the basis of their country of origin.  But such country comparative approaches tend to emphasis "us versus them" thinking.  But today a great many number of multinationals have been opting for strategic allowances and these alliances have, in turn, become the determination of the human resource management as well as business practices.4

However, the fact to be taken into account is that the organisations, which have gone beyond the boundary of their origin of the country, have a sizeable increase in the number of managers, technical and professional employees employed outside their home countries.

The researcher, in the course of his studies, has come upon certain facts.  There was a study conducted in 1993 to which as good as 110 senior human resource and industrial relations managers from multinational companies located all across the globe viz. North America, South America, the Middle East, Asia, Europe and Australia responded.  Interestingly enough the MNCs were represented by industries in textiles, banking, computers, insurance, telecommunications, industrial chemicals, building materials, pharmaceuticals, consumer products, petroleum, foods, automobiles, automotive supplies, international engineering & construction, financial services, aerospace, wood & paper products and hardcore machinery manufacturing.5

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Source: E-mail December 23, 2010


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