Introduction
Human resource management relates to staffing, designing of work and managing compensation, benefits for an organization. This is about recruiting and selecting the best workers available on the labor markets, training and developing them in order to achieve optimal results, motivating and leading them and finally, ensuring that the administration of remuneration and organization for effective work is achieved. However, human resource management has to be fixed into the strategic context of an organization. It has to be positioned to ensure that the best interest of the organization is met within the production process. Also, globalization and internationalization of a business lays the foundation for changes in an organization. The purpose of this paper is to critically analyze and review human resource management (HRM) in the global context and integration into the strategy. This will be done in two parts. The first part will examine the difficulties and challenges that come with the globalization of a business and how to ensure HR function is met. The second part will discuss the way organizations adapt management styles and theories to achieve their goals.
Section 1: Challenges in Managing People in Global Markets
There is the creation of a global market which is creating challenges for the management of people. Globalization refers to the phenomenon where organizations internationalize and seek to grow to different countries around the world and maintain a centralized leadership system that has oversight over global operations. This means that the management and directors of a company will have to be concerned with various units of their business in different parts of the world when they globalize. This is because there will be different investments and branches that will be opened across the world and this will involve the need for the management of these different units. One of these important resources and strategic business units that ought to be managed in globalization is the management of workers and employees.
The management of people in a global business comes with complications in five main areas:
Culture
Communication
Standards and regulations &
Diversity management
Economic inequalities and challenges
Culture is defined as the software of the mind. Culture defines the ideas, views and concepts that people view as appropriate and acceptable. And it is as a result of years of a group of people living together and building a set of what is right and what is wrong. Culture is very powerful because it defines the way and means through which people in a given country and community perceive the world and interpret situations and matters. Culture differs from one place to another. However, it shapes the dominant perceptions and worldviews of different groups of people. Therefore, the management of people has to be designed in such a way and manner that the best interest of people is accepted and integrated into the system of doing things. In managing people, culture has to be taken into account in adapting the organization for a local market. This is known as localization and it is necessary because workers have to be treated within a cultural context that they understand and appreciate. This must therefore form the basis of the organizational culture that will be created for each country and region. That is the only way that an organization can eliminate conflicts and ethical issues. This is because imposing a foreign culture in a foreign country always leads to major problems and issues.
Communication is a major requirement of global businesses. This is because every business works on the premise of delegation of authority, acceptance of responsibility and accountability. This makes it imperative for an organization to have a system of feedback and feedforwards in order to communicate and monitor progress and ensure tasks are completed. Due to the fact that globalization requires doing business across different countries and different continents, there is always the challenge of being able to communicate and supervise activities across boundaries. This issue is often handled through the institution of modern information technology and processes which ensures there is a real time exchange of information.
Every industry has its standards and regulations. This includes generally accepted concepts and theories that must be adopted and accepted in terms of production. However, in reality, every country over the past 50 years has created its own identities and its own measures of evaluating HR trends and this is often instituted by national authorities. These standards in the host country might not always fit into the standards of the home country. This therefore a problem with creating fit between the two different countries and their branches. Thus, there are problems and issues with human resource management. This could lead to ambiguities which could lead to many negative situations for an international business. On the other hand, there could be conflicts between the instructions given from the home country of a multinational corporation and this could make it difficult for an organization to achieve the best of results. In order to achieve the best results, there is often the need to hire external consultants who know both cultures and systems to unify the standards and regulations of managing people to create a local identity that will lead to optimal results.
Diversity management is a challenge in the global world. This is because every country and community is striving towards the achievement of integration. This comes with local questions and issues that are problematic and challenging in most countries. They create an ethical requirement for companies and this will mean that every company will have to endeavor to ensure that they understand the cultural needs of every country they have a connection with. This leads to a process whereby diversity has to be known and its related issues must be identified and handled. Diversity management is also important in introducing foreigners in the internationalization of a business. This is because there are many issues and problems that this could create. Thus, a business will have to ensure that it is fully aware of the implications of such a process and make the effort to deal with all the aftermaths that could potentially come up.
Economic disparity refers to the differences in the standard of living and cost of living in different parts of the world. It has implications for remuneration and motivation. This is because in managing people, there is the need to find an appropriate compensation to give to people who are hired in different units of a business around the world. Due to disparities and differences in the cost of living, the remuneration must be evaluated and paid in ways that will ensure that the best results are attained and the least remuneration is given out. In terms of standard of living, it determines the level of motivation that a person needs at a given point in time. Thus, the cost of living and standard of living defines which salary is most appropriate for which group of people. This creates a complication in this era of globalization and requires some degree of sensitivity.
Also, other issues like the adherence to laws and corruption rules and ethical standards are important. This is because a global business will have to understand the laws and national ethics in order to identify the most appropriate HR system and process that must be instituted and utilized in running an organization.
Section 2: Management Styles and Achievement of Organizational Goal
Organizations are formed when the shareholders or owners come together to pool their resources to create a unique entity for the maximization of their wealth through the attainment of profits. This is done by delegating power to take decisions to the directors who have a fiduciary duty to the shareholders. The process leads to a system whereby the directors have the right to spend money for the betterment of the organization and they need to employ managers to undertake the entrepreneurial duty of combining factors of production.
Management is about the utilization of measures and processes that will ensure that the factors of productions are combined in the best way and form possible for the achievement of optimal results. Management involves the utilization of some methods and approaches for the achievement of organizational goals. The presence of organized methods and systems of management started when scientific management started in the early 20th century. This has led to the scientific methods of management, which involves the use of methods to maximize results and attainment of optimal returns for the owners of the company. This is an efficiency based method that seeks to achieve optimal returns for the management. This leads to the concern for results with little sensitivity for the concern for people. Management schools developed over the years to introduce social theories that ensured that there was the concern for people and this led to the institution of transformational leadership methods that are used to achieve the best results of workers by integrating their needs and processes.
The directors and managers of a company have the obligation of ensuring that they institute strategic management, which includes long-term, organizationwide plans that are meant to move the company from one point to another. There is the need for the adoption of management styles and the utilization of theories for the attainment of four main goals:
Stability
Creation of an organizational culture
Reduce cost and
Create a basis for change management
Stability is an important and vital part of every organization. This is because organizations are better ran if there is a system through which things are analyzed and evaluated in order to achieve results. If there is a management philosophy and framework that is adopted by the organization, there is knowledge of how things can be done. This leads to consistency and once there is consistency, things can be decided easily and conveniently. When there is stability, it means the absence of doubt and ambiguity. This ensures that the organization can do things quickly and they can focus more on the primary obligations and primary duties they have as a management team. Stability is important and is promoted by the adoption of a management style which the leaders can institute. This enables everyone in the organization to understand the best interest and within that, they are able to work within a fairly stable system that can ensure that results are guaranteed.
Organizational culture is defined as the relatively stable norms, symbols and processes that are utilized in an organization and it influences the way workers think and how they define what is right and wrong. When managers choose a given form of management, this can be applied in the organization and used as the basis for the formulation of the way things are done. This is done by instituting a code of best practice. This is done by identifying methods and processes that work. Where things work and things are appropriate, they are instituted and used as guidelines. Where processes are problematic and lead to issues when implemented, they are avoided in the future. This leads to a system of organizational culture that is accepted and utilized throughout the organization. This promotes organization and helps in growing and enhancing the business in many ways and forms.
Directing and managing organizations is expensive. Small businesses spend up to half of their remuneration on managers and directors. This shows that management is important. Adopting a definite style of management and/or a management theory makes sure that management gains results and these results justify the payment for good management systems. This is because management theories and styles lead to the efficient systems of operating and running organizations. Since they are based on research and practice that has been proven to be productive, management theories and styles help to achieve optimal results and this enables organizations to grow and achieve results and grow in attaining optimal performance. In other words, when a team of managers carry out management without the utilization of management theories and styles, they are most likely to make mistakes and these mistakes increase the costs of running organization. If managers institute theories and concepts that work and are productive, they are able to gain results and prevent mistakes that are inevitably made through experimentation. This hastens the learning process and enhances the learning curve of managers and ensures the attainment of optimal results and cuts down agency costs for companies.
Finally, instituting management systems and processes create a standardized way of doing things. This means that management get an original way of doing things. This is a set of first principles that are to be utilized. Since the business environment is dynamic and there is always the need for change, the institution of standardized management style sand theories enable an organization to conveniently change and modify its systems. This is because the institution of a system of management that is already known will ensure that the management of an organization can adjust and modify their organization. This is because there is a system that is already instituted, change can simply be done by unfreezing and refreezing a new system that is more appropriate and help the company to achieve its goals and objectives.
Therefore, it is conclusive that having a management system is something that helps an organization to set up its first principles devoid of mistakes and errors which could prove to be expensive. This leads to stability and the stability helps to achieve better results by means of properly utilizing resources and achieving better results.
Conclusion
Growing global markets lead to cultural challenges and issues relating to the standardization of culture and processes. There are major issues with communication and economic disparities which affect the fixing of remuneration. In relation to management theories, they are important because they help an organization to grow and enhance its prospects without experimenting which could prove expensive. Management theories are important because they ensure stability and promote the optimal utilization of resources.
References
Armstrong, M. (2012). Strategic Human Resource Management. London: Kogan Page.
Bowyer, J., & Martinelli, S. (2012). Organisational Management T-kit. Berlin: Council of Europe.
DuBrin, A. (2011). Essentials of Management (3rd ed.). Mason, OH: Cengage.
Hofstede, G. (2010). Culture and its Consequences: The Software fo the Mind. New York: FT Press.
Johnson, G., Scholes, K., & Whittington, R. (2012). Exploring Corporate Strategy. London: Financial Times Publications.
Lussier, R., & Hendon, J. (2014). Fundamentals of Human Resource Management: Functions, Applications, Skill . New York: SAGE.
Nelson, D., & Quick, J. (2013). Organizational Behavior: Science, The Real World, and You. Mason, OH: Cengage.
Parmelli, E., Flodgren, G., Schaafsma, M. E., Baillie, N., Beyer, F. R., & Eccles, M. P. (2011). The effectiveness of strategies to change organisational culture to improve healthcare performance. Cochrane Effective Practice and Organisation of Care Journal, 1002 - 1009.
Pieterse, J., & Rehbein, B. (2011). Globalization and Emerging Societies: Development and Inequality. New York: Palgrave Macmillan .
Protogerou, A., Caloghirou, Y., & Lioukas, S. (2012). Dynamic capabilities and their indirect impact on firm performance. Industrial and Corporate Change, 21(3), 615-647.
