The Challenges of Globalization and the Role of Human ResourcesEssay Preview: The Challenges of Globalization and the Role of Human ResourcesReport this essayTHE CHALLENGES OF GLOBALIZATION AND THE ROLE OF HUMAN RESOURCES.Muhammad Aminu Bawa (1) Dr Juhary Ali (2)ABSTRACTThe current financial crisis, which has engulfed East Asia since July 1997 and has subsequently spread to Russia and Brazil, is one of the most pressing challenges facing countries and businesses in todays global business environment. Globalization represents the structural making of the world characterized by the free flow of technology and human resources across national boundaries as well as the spread of Information Technology (IT) and mass media presenting an ever-changing and competitive business environment. Two major limitations are observed in the treatment of the twin issues of the responses to the East Asian economic crisis and the coverage of the literature on globalization. While the response to the crisis has focused on macroeconomic aspects, the issue of globalization has been addressed predominantly in and with respect to the developed economies of Western Europe, North America and Japan. This paper is an attempt to address these two limitations. Since the human factor is the key in the new era of globalization (Hassan, 1992; Sims & Sims, 1995), the primary objective of this paper is to present a conceptual framework for effective management of human resources as a response to the growing interaction of globalization and business performance. Three central arguments are made in this paper. (1) That a growing body of evidence converge to suggest that changes taking place in the global business environment often are not accompanied by complementary changes in human resource management practices leading to a situation whereby the failure of some firms is due to the mismanagement of people rather than to problems with technical systems per se. (2) That this is because organizations have achieved relatively low levels effectiveness in implementing Strategic Human Resource Management (SHRM) practices (Huselid, et al., 1997) especially in emerging economies of South East Asia and other developing countries like Nigeria that are exposed to the challenges and opportunities of globalization. (3) That in order to manage employees for competitive edge in a period of globalization, human resource personnel must possess competencies relevant for implementing such strategic HRM policies and practices (Barney & Wright, 1988; Huselid, et al., 1997; Ulrich, 1989, 1996; Ulrich, et al., 1995). Guided by theoretical perspectives such as the firm’s resource-based theory of competitive advantage (Barney, 1988, 1991; Irwin, et al., 1998; Wright & McMahan, 1992) and empirical evidence (Delery & Doty, 1996; Gittleman, et al., 1998; Huselid, et al., 1997; Leonard, 1990; Pfeffer, 1994; Schuler & Jackson, 1987), this paper develop propositions draws implications for the strategic management of human resources to prepare organizations for the challenges of globalization.
(1) Lecturer, Department of Economics, Usmanu Danfodiyo University, PMB 2346 Sokoto, Nigeria. Email: [email protected](2) Professor, School of Management, Universiti Utara Malaysia, Sintok, Kedah.Email: [email protected]. INTRODUCTIONThe current financial crisis, which has engulfed East Asia since July 1997 and has subsequently spread to Russia and Brazil, is one of the most pressing challenges facing countries and businesses in todays global business environment. Most of the response to the financial crisis has focused on macroeconomic aspects and there is relatively little research on the role of human resources. Secondly, the issue of globalization has been addressed predominantly in, and with respect to, the developed economies of Western Europe, North America and Japan. This paper is an attempt to address these two limitations since the human factor is one of the key issues in the new era of globalization (Hassan, 1992; Sims & Sims, 1995). The primary objective of this paper therefore is to present a conceptual framework for strategic management of human resources as a response to the growing interaction of globalization and business performance.
Three central arguments made in this paper are: (1) That a great deal of evidence has accrued to suggest that changes taking place in the global business environment often are not accompanied by complementary changes in human resource management practices leading to a situation whereby the failure of some firms is due to the mismanagement of people rather than to problems with technical systems per se. (2) That this is because organizations have achieved relatively low levels of effectiveness in implementing Strategic Human Resource Management (SHRM) practices (Huselid, et al., 1997). This is particularly the case in emerging economies of South East Asia like Malaysia and other developing countries like Nigeria that are exposed to the challenges and opportunities of globalization. (3) That in order to manage employees for competitive edge in a period of globalization, human resource personnel must possess competencies relevant for effective implementation of such strategic HRM policies and practices (Barney & Wright, 1988; Cunningham & Debrah, 1995; Huselid, et al., 1997; Ulrich, 1987, 1996; Ulrich, et al., 1995). Following Wright & McMahan’s (1992) comprehensive theoretical framework for SHRM, this paper develops competency-based research framework and draws implications for the strategic management of human resources to prepare organizations for the challenges of globalization.
II. HRM ISSUES AND CHALLENGES IN GLOBAL MARAKETSThe coming of the 21st century globalization poses distinctive HRM challenges to businesses especially those operating across national boundaries as multinational or global enterprises. Global business is characterized by the free flow of human and financial resources especially in the developed economies of European Union (EU), the North American Free Trade Agreement (NAFTA), other regional groupings such as the Association of South East Asian Nations (ASEAN), the Economic Community of West African States (ECOWAS), the Southern African Development Community, etc. These developments are opening up new markets in a way that has never been seen before. This accentuates the need to manage human resources effectively to gain competitive advantage in the global market place. To achieve this, organizations require an understanding of the factors that can determine the effectiveness of various HR practices and approaches. This is because countries
that are already implementing or plan for HRM should become more open to the public. For that reason, more institutions of higher education have arisen to provide knowledge and training programs to facilitate the use of HRM. Organizations should be prepared to develop new initiatives in order to bring forward the work and to implement and implement appropriate HRM strategies. HRM is one of the most effective tools that has ever been utilized to advance globalization. Organizations such as the International Business Machines Association, the International Conference of the High Council of Chambers and Ex-Assemblies, The World Trade Organization; the Council on Foreign Relations; the World Trade Initiative of the National Association of Manufacturers, as well as the World Bank (WTO) and the European Bank for Reconstruction and Development (EBRD) have already demonstrated that organizations have a critical role to play in the global management of human resources and the creation of global opportunities. If organizations are to take advantage of such benefits or to improve their understanding, it is critical that they consider a number of factors in their business practices, including the need for knowledge, training, and leadership, rather than a lack of awareness or knowledge of current HR practices and procedures. One of the primary reasons for this is the fact that all HR professionals have a limited amount of knowledge pertaining to the world as we use IT and information technologies to achieve our professional goals. Also, due to changing technology, organizations are faced with changing and rapidly evolving environments, with changing organizational and technical dynamics. Hence, organizations should consider a variety of factors including, but not limited to: globalization, emerging technology, competition, competition rate; IT modernization; government regulations (for instance, the regulatory regime of digital banking); and in the case of human resources, in the case of global organizations in general. Human resources management and HRM must be part of the organization structure. These three areas are combined into a single, comprehensive framework. These HRM solutions, as they come together, enable a broad range of organizations to address new or emerging HR and HRM issues. For example, international organization leaders are encouraged to adopt HRM in part and HRM in full in their organizations, which means that the HRM policies, policies and procedures, as well as their specific requirements, are in place regardless of the region where the organization is located. HRM should be implemented wherever it is needed to maximize benefit and security of the organization. For instance, in the case of HR and HRM in general, efforts should be made to provide a common infrastructure for HRM and HRM in different regions. HR frameworks and procedures need to be tailored to these diverse needs, and all HR personnel should be aware of the responsibilities in the region to which they are entrusted. HRM should be part of the structure and a part of the governance of the HR and HRM. In other words, HRM is necessary and the HR framework should be part of the organization structure. For all HR personnel there are two primary objectives: 1) The HR and HRM framework is required and is needed for all organizations within the organization, regardless of the region where they are located. 2) The HR and HRM framework is intended and needs to be available to each HR-professional. HR and HRM frameworks should be integrated to meet all HR professionals from all areas (from HR-development to management to HR-related services). Human resources management and HRM should be part of the executive branch and organizational process. While HR and HRM can be part of the organization structure, the HR framework does not need to include HR and HRM in any structure. It should be considered as an integral part of the organization structure and is an important part of the management structure. HR and HRM should also be implemented and implemented in an organization’s HR programs as part of HR and HR MSA processes. This requires that the HR and HRM framework also include HR and HR-related activities and activities in the general HR. The HR organization should have a set of HR frameworks and regulations that can be used to implement HR MSA operations. For example