EFFECT OF GLOBALISATION

Examining the Effect of Globalisation on Human Resource Management (HRM)

Abstract

This study examines the effect of globalisation, particularly illustrated in the growth of firms in many cultures through multinational companies, in business operation mainly in HRM. Its primary focus defines how HRM practices, particularly in establishing good employee-firm relationships for companies that are expanding their operations from domestic to international level, overcoming almost all territorial boundaries.

Table of Contents

CHAPTER 1: INTRODUCTION4

Defining Globalisation and HRM6

Problem Statement and Research Questions12

Research Hypotheses13

Research Objectives13

Significance of the Study14

CHAPTER 2: LITERATURE REVIEW15

Forms of International HRM16

The Operation Of Parent-Country Firms Overseas17

The Operation Of Foreign Firms In The Home Country19

The Development of IHRM20

Differences between International and domestic HRM25

Strategic IHRM29

The Optimists34

The Critics36

Globalisation and Human Capital Investment39

Theorising Globalisation And Its Corporate Consequences40

Governance and IHRM Implications45

Perspectives on Globalisation49

CHAPTER 3: METHODOLOGY53

Operationalisation53

Research Design54

CHAPTER 4: DATA COLLECTION AND FINDINGS AND ANALYSIS56

Method of Data Collection56

Method of Data Analysis57

One-way Chi Square Test57

Ethical Considerations59

Findings59

Data Analysis60

CHAPTER 5: CONCLUSION61

REFERENCES63

BIBLIOGRAPHY65



Chapter 1: Introduction

Globalisation has achieved significant importance in the last century; specifically in terms of the manner business is conducted at the global level. Brewster and Hegewisch (cited in Jackson & Schuler, 1995) states that the globalisation of national economies and the evolution of multinational enterprises have resulted in the increased awareness and documentation of the differences in how human resource (HR) is managed among countries. The changes brought about by globalisation led to the need to change HR practices in order for firms to remain competitive in the global market. The specific aspect of HRM that serves as the integral part to this study would be keeping sound employee-firm relationship.

The body of current information on international human resource management (IHRM) has grown dramatically, resulting from the rapid growth in international car manufacturing industry. The shift in focus from a domestic to a global business perspective has a profound impact on the corporate human resources management activities (Dowling et al., 1999). Human resource management (HRM) is understood in the broadest sense of the term, encompassing “all management decisions and actions that affect the nature of the relationship between the organisation and the employees - its human resources” (Beer et al., 1984, p. 1). The effective management of car manufacturing industries in Europe and USA is vital for the successful implementation of international strategies (Bartlett and Ghoshal, 1989).

In addition, the competitiveness of car manufacturing companies and even nations has increasingly been recognised to stem from the calibre of their people and people management strategies (Pieper, 1990; Porter, 1990; Pucik, 1992). All in all, the globalisation of business has resulted in the increasing recognition of the value of a well-managed workforce and the evolution of the human resource function from being viewed as a support function to one of strategic importance (Pucik, 1992; Teagarden and Von Glinow, 1997; Scullion and Starkey, 2000).

Research on HRM in an international context has been approached from a number of different disciplines, including amongst others human resource management, international business, cross-cultural management, strategic management, psychology, comparative management, and by both academics and ...