INTERNATIONAL HUMAN RESOURCE MANAGEMENT

Impact of Credit Crunch and International Human Resource Management



Impact of Credit Crunch and International Human Resource Management

Introduction

The credit crunch in 2008 was one of the most crucial time periods for organizations all around the world. The financial crisis changed the entire outlook of the global markets and survival became the need of the hour. Organizations faced critical challenges in sustaining their growth and competitive advantage. The credit crunch crisis led towards collapse of many organizations due to their inability to deal with the crisis effectively. In order to sustain growth and survival of companies in the international markets, there is a dire need to identify human resource issues and challenges. When the human resource issues and challenges are identified, then only the company can revise its human resource practices for achieving long term competitive advantage. Human resource is the most important asset of the organization as it leads towards the sustainable long term competitive advantage. The competitive advantage in the highly uncertain markets can be achieved through effective human resource. The human resource management is the key to handle the crisis and be prepared for any unforeseen situation.Discussion

Credit Crunch Crisis and HR Issues About a year ago the credit crunch became widespread primarily hitting the financial institutions worldwide and had its impacts felt in the motor industry reaching all players of the economic life. There were no companies that could escape its impact and most organizations lived through the recession negatively. The fluctuation of the economy is a natural phenomenon. However, the constant and worldwide crisis is rare to be experienced. The economic players who had been following the fluctuations of the market for a longer period could experience its signs beforehand, but it was impossible to predict when they would be taking place. That is why the crisis hit most companies when they were not prepared for it. In many cases, they did not have carefully planned corporate strategies for the crisis and both the management and the labour force had to face a problem suddenly that had not been experienced before. Although crisis management is taught at schools, it is not the same to face it in real life and to make the proper decisions. There were two types of companies, one that prepared for the crisis with its uninterrupted types of investment and another that missed it. The previous ones are the so-called investing entrepreneurs who were able to keep their competitiveness such as Szikrai Winery Kft., which had acquired Szobi syrup. The less prepared ones will lag behind while most of them become followers (Gyorgy, 2009). Since the worldwide crisis, the most influential states have been increasing their intervention while its opposite holds true for Hungary. Such Keynesian views have come forward according to which the role of the state will be appreciated in the present situation and there will be a need for state subsidies and support in certain sectors. The objective of the Hungarian state is not the creation ...