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Globalization and the Emerging Role of HR

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Benjie Garcia Ingco Presented by: Professorial Lecturer Edalina D. Solano Globalization and the Emerging Role of HR
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Benjie Garcia IngcoPresented by:Professorial LecturerEdalina D. Solano

Globalization and the Emerging Role

of HR

INTRODUCTIONThe globalization of businesses, the

emergence of a borderless workplace, and technological revolution are creating new challenges for the management of human resources. The changing role of that HR plays today is a reflection of the changes that organizations experience in their economic, social, political and legal environments. They must take a proactive and strategic stance, assume a global entrepreneurial role, and understand the implications of globalization in the day-to-day management of the company’s human resources.

THEORETICAL BASESDespite the rapid growth of multinational

corporations during the past two decades, research in the area of international human resource management only took off during the past decade. Since then, there have been a number of studies attempting to explain the factors that influence the organization and structure of the international HR function as well as the design of HR programs for global application.

THEORETICAL BASESAccording to Adler and Ghadar (1990)

pointed out that the role of HR in the global setting is affected by the stage at which a multinational corporation is in the global life cycle. The four stages are as of follows:1. Domestic 3. Multinational2. International 4. Global

THEORETICAL BASES1. DOMESTIC

The international human resources hardly has any effect on the domestic stage for the reason that the plant locations are local or national. The only time it plays a role is when the product and service is introduced to foreign clients. This stage mainly focuses on home market and export.

THEORETICAL BASES2. INTERNATIONAL

The emergence of the role of the HR begins at this stage since the company has started to branch out and shift its focus to international marketing (though production is still based on domestic locations) so there is a need of transfer of technology internationally.

THEORETICAL BASES3. MULTINATIONAL

In this stage, the company establishes production facilities in several locations around the world giving the HR a vital role in recruiting in the host country or undertaking the expatriation of managers from parent company.

THEORETICAL BASES4. GLOBAL OR TRANSNATIONAL

HR becomes a very significant component of the business process as the company aims to gain and sustain a competitive advantage. HR becomes a crucial business partner and strategic HR programs have to be developed to ensure the hiring, retention and motivation of employees worldwide.

THEORETICAL BASESAccording to Perlmutter (1969) the role of

the HR in a global environment is greatly affected by the three states of mind of international executives that are as of follows:1. Ethnocentric or home country-oriented2. Polycentric or host country-oriented3. Geocentric or world-oriented4. Regiocentric *Later added in 1979 by Perlmutter

with the help of Heenan

THE CHANGING GLOBAL ENVIRONMENT AND IMPLICATIONS FOR THE STRATEGIC

MANAGEMENT OF HUMAN RESOURCESChanges in the business and work environment resulting from globalization have important implications for the management of human resources. To understand these implications, it is necessary to discuss the characteristics of the global workplace. They are:• Diversity of the work force• Changing nature and organization of work• Complex nature of the global environment

THE CHANGING GLOBAL ENVIRONMENT AND IMPLICATIONS FOR THE STRATEGIC

MANAGEMENT OF HUMAN RESOURCESDIVERSITY OF THE WORK FORCE

The increased demand for individuals with special qualifications not always available in the host country forces recruitment efforts to be worldwide resulting in different nationalities and cultures in the workplace. This exerts tremendous challenge on the management of human resources with regards to developing human resource programs.

THE CHANGING GLOBAL ENVIRONMENT AND IMPLICATIONS FOR THE STRATEGIC

MANAGEMENT OF HUMAN RESOURCESCHANGING NATURE AND ORGANIZATION OF WORK

Technological innovations and globalization of business caused responsibilities for aspects of business to disperse across a region and around the world. An essential role of the global HR function is to establish programs that encourage maximum adaptability and maximum coordination.

THE CHANGING GLOBAL ENVIRONMENT AND IMPLICATIONS FOR THE STRATEGIC

MANAGEMENT OF HUMAN RESOURCESCOMPLEXITY OF THE GLOBAL ENVIRONMENT

The work setting in the global economy is characterized by:• Intense competition• Continuous change• Political and legal diversity

THE CHANGING GLOBAL ENVIRONMENT AND IMPLICATIONS FOR THE STRATEGIC

MANAGEMENT OF HUMAN RESOURCESCOMPLEXITY OF THE GLOBAL ENVIRONMENT• Intense competition

HR has to:- Find knowledgeable workers who have the

competencies and behaviours required to ensure the organization’s competitiveness

- Provide appropriate training and development programs

- Be creative in designing performance management systems, incentives, and compensation packages to reinforce desired behaviours and competencies

THE CHANGING GLOBAL ENVIRONMENT AND IMPLICATIONS FOR THE STRATEGIC

MANAGEMENT OF HUMAN RESOURCESCOMPLEXITY OF THE GLOBAL ENVIRONMENT• Continuous change

HR challenges:- tracking employment legislation- demographic trends and social policy

development in foreign regions- developing fluency in cross-cultural

communication- ensuring employee security in an

increasing turbulent world

THE CHANGING GLOBAL ENVIRONMENT AND IMPLICATIONS FOR THE STRATEGIC

MANAGEMENT OF HUMAN RESOURCESCOMPLEXITY OF THE GLOBAL ENVIRONMENT• Political and Legal Diversity

HR Challenge:- How far HR can go to help organizations

prevent unionization of employees without violating a country’s unfair labor practice legislation?

CONCLUSIONThe HR’s role in MNCs depends greatly on

the organization’s structure and strategy. The HR has to adapt in the working conditions given by the organization and must be able to work in it effectively.

With this to consider, the HR has to have the seven most essential skills identified by Eichinger and Ulrich (1995). They are as of follows:

CONCLUSION1. Global operating skills2. Business and financial savvy3. Strategic visioning and critical thinking and

problem-solving skills4. Ability to use information technology5. Deep HR technology savvy6. Change management skills7. Organization effectiveness

REFERENCESAIB Fellow - Howard V. Perlmutter. (2004, October). Retrieved December 9, 2016, from https://aib.msu.edu/Fellow/43/Howard-V-PerlmutterDavid A. Heenan. (n.d.). Retrieved December 9, 2016, from http://explore.georgetown.edu/people/dah53/Diamante, M., & Ledesma-Tan, G. (2007). Human Resource Management: Local and Global Perspectives. Retrieved December 9, 2016.Fariborz Ghadar: Distinguished Scholar and Senior Adviser. (n.d.). Retrieved December 9, 2016, from https://www.csis.org/people/fariborz-ghadarLander, S. (n.d.). Geocentric Advantages & Disadvantages. Retrieved December 9, 2016, from http://yourbusiness.azcentral.com/geocentric-advantages-disadvantages-27693.htmlRegiocentrism. (n.d.). Retrieved December 9, 2016, from http://www.mbaskool.com/business-concepts/human-resources-hr-terms/16220-regiocentrism.htmlStrategy and International HRM. (2009). Retrieved December 9, 2016, from http://blogforhrm.blogspot.com/2009/03/recent-developments-in-theory-and.htmlThe Creative World of Nancy Adler (MBA '74, Ph.D. '80). (2011, April 4). Retrieved December 9, 2016, from http://www.anderson.ucla.edu/media-relations/2011/nancy-adler

Thank You!


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