Strategic Human Resource Management in the New Global Economy
Abstract
The paper focuses on the development of strategic human resource management in the context of economic globalization. The analysis of the current situation reveals the fact that globalization is the mainstream trend of the modern economy that affects strategic human resource management dramatically. In such a situation, strategic human resource management has to overcome numerous barriers created by globalization, including global network instability, multiplicity of network units, discontinuities in internal organizational support, and others. On analyzing the problem, the conclusion about the necessity of the development of the helpful strategies is made.
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Introduction
The modern economy is characterized by the profound changes that are actually known as the process of globalization. In fact, globalization is the mainstream trend of the modern economy which affects all industries and practically all companies operating in the world market regardless the country they represent. Moreover, the process of globalization gradually eliminates national borders to the extent that the companies rather tend to operate worldwide developing its network throughout different countries of the world than to focus on a particular national market.
The modern economy is characterized by the profound changes that are actually known as the process of globalization. In fact, globalization is the mainstream trend of the modern economy which affects all industries and practically all companies operating in the world market regardless the country they represent. Moreover, the process of globalization gradually eliminates national borders to the extent that the companies rather tend to operate worldwide developing its network throughout different countries of the world than to focus on a particular national market.
Naturally, the process of globalization and the changing basic economic trends cannot fail to affect the managerial style and strategy. In this respect, strategic human resource management seems to be particularly significant and exposed to the impact of the process of globalization. Obviously, human resource management is also affected by the general trends of the modern economy. This is why it is necessary to carefully analyze the current economic processes and its effects on strategic human resource management. In this respect, it is extremely important to discuss the major barriers the process of globalization exposes on strategic human resource management and clearly define the basic competences strategic human resource management needs in the context of the process of globalization.
The current situation and trends in strategic human resource management and world economy
On analyzing the current situation in strategic human resource management, it is primarily necessary to point out that the current development of human resource management is determined by the major economic trends, among which the process of globalization is of a paramount importance. It should be said that the modern economy stimulates the growing cooperation between different countries, international trade and, naturally, close integration of all units of companies operating worldwide. In fact, the process of globalization implies the development of international business links and cooperation. At the same time, globalization leads to the rapid development of multinational corporations and companies that operates in the international market.
On analyzing the current situation in strategic human resource management, it is primarily necessary to point out that the current development of human resource management is determined by the major economic trends, among which the process of globalization is of a paramount importance. It should be said that the modern economy stimulates the growing cooperation between different countries, international trade and, naturally, close integration of all units of companies operating worldwide. In fact, the process of globalization implies the development of international business links and cooperation. At the same time, globalization leads to the rapid development of multinational corporations and companies that operates in the international market.
Obviously, nowadays, multinational corporations play the dominant role in the world economy. Moreover, it is even possible to estimate that the expansion of a company in the international market is not just a question of increasing its profitability or market value, but it is rather a question of its survival in the new economic conditions1. This is actually what the process of globalization leads to. Naturally, companies cannot ignore this trend and are forced to reevaluate and change their strategy.
However, in the situation of the growing internalization or globalization of business, it is evident that strategic human resource management should operate in a new environment and deal with new problems which were not typical for nationally oriented companies in the past. In this respect, it should be said that the process of globalization contributes to the growing difficulties related to various spheres of human resource management. In fact, strategic human resource management should deal with the cultural problem since companies operating worldwide have to constantly develop universal standards of their work and quality of services that could be identical in all parts of the world2. This means that employees of multinational companies should have a common organizational culture which could not contradict to their national culture, norms and traditions.
Furthermore, it is also necessary to point out that the integration and cooperation between different units of multinational companies in different parts of the world is also very important to strategic human resource management since people working in different countries have different mentality, style of work and, thus, needs unique approaches in human resource management3. Naturally, one of the major objectives of strategic human resource management in the context of globalization is to minimize such difference and close the gap between units operating in different parts of the world.
On the other hand, globalization also opens new perspectives to strategic human resource management. In this respect, it should be said that often the employment of personnel from different countries of the world may have a positive effect on the financial position of a company since it may substantially decrease its expenditures due to the different level of wages in different parts of the world. For instance, the cost of labor force in developing countries is considerably lower compared to the most developed countries of the world, such as the US or EU. No wonder, in such a situation, many leading companies, including those that operate in highly technological domains, tend to employ personnel in developing countries, while the development of new technologies provide companies with an opportunity to ignore geographical barriers and fully benefit from the effective cooperation and mutual work of employees which may actually work in different countries of the world. For instance, many Western companies employ IT specialists from Asian countries, such as India, which work in cooperation with local specialists remaining in their own countries4. In such a way, companies can develop international projects involving specialists from different countries of the world which may fully coordinate their work with the help of new technologies even without physical meeting and communication, using instead virtual communication.
Barriers exposed by globalization to strategic human resource management
Nevertheless, the benefits of globalization to strategic human resource management would hardly be effective if the existing problems and barriers are not clearly defined and overcome. Obviously, globalization brings a lot of new problems and creates a number of barriers on the way to the development of really effective human resource management. In this respect, it is possible to mention the multiplicity of a company’s units as one of the major barriers exposed by globalization to strategic human resource management. Basically, many companies have the multitude of global network units which work should be constantly coordinated. In such a situation, it is extremely important to a human resource manager to constantly count and prioritize in selecting actual collaborating units. In actuality, this requires the shift of human resource management selection criteria for personnel as well as practices as the company’s strategic orientation changes5. This means that a human resource manager needs to develop an informed sense of which unit’s human resource management system is the most compatible with the strategic objectives of the company.
Nevertheless, the benefits of globalization to strategic human resource management would hardly be effective if the existing problems and barriers are not clearly defined and overcome. Obviously, globalization brings a lot of new problems and creates a number of barriers on the way to the development of really effective human resource management. In this respect, it is possible to mention the multiplicity of a company’s units as one of the major barriers exposed by globalization to strategic human resource management. Basically, many companies have the multitude of global network units which work should be constantly coordinated. In such a situation, it is extremely important to a human resource manager to constantly count and prioritize in selecting actual collaborating units. In actuality, this requires the shift of human resource management selection criteria for personnel as well as practices as the company’s strategic orientation changes5. This means that a human resource manager needs to develop an informed sense of which unit’s human resource management system is the most compatible with the strategic objectives of the company.
Furthermore, there also exists the problem of multi-dimensionality of strategic human resource leadership task. In fact, in the current situation, human resource managers should deal with a variety of multiple interdisciplinary dimensions. In other words, they need to have a profound knowledge and skills in technical, legal, economic, political dimensions which may vary considerably depending on the country. Consequently, the process of globalization exposes extremely high demands to professional competency of human resource manager which should be applied effectively in different dimension and in a possibly shorter time6 obviously, the effective work of a company is unimaginable without the rapid realization of effective human resource strategies in all units of a company. However, the latter is impossible without a profound knowledge of various dimensions mentioned above.
Obviously, this problem is closely related to the problem of multi-skill leadership demands for strategic human resource management in the conditions of globalization.
Basically, modern multinational companies require that strategic human resource manager was characterized by flexible skills, abilities and knowledge that could go beyond those of the traditional hierarchical human resource management7. In fact, a human resource management should be able to assess the current trends and effectiveness of different units of a multinational company and be able to apply the most effective strategy to all units in a short period of time in order to increase the effectiveness of human resource management within the entire company.
At the same time, it is also necessary to remember about the global network instability. This means that a company operating worldwide needs to fully coordinate the work of all its units in different parts of the world and make it really effective. Naturally, it is quite difficult to fulfill this goal in the situation when the company units operate in different countries of the world. As a result, human resource managers have to bridge the gaps of incomplete knowledge or goal conflicts in the company’s network about human resource management flexibility8.
This means that effective strategic human resource management should be able rapidly applied in all units of the company. In other words, human resource management should react on the changing situation and apply the most effective strategies in all units, increasing effective cooperation between them, increasing the cooperation and sharing of knowledge and effective methods of work between the units.
Also, globalization exposes strategic human resource management to the problem of discontinuities in internal organizational support. In this respect, it should be said that specialists9 underline that the success of human resource management systems in the global market requires prior attainment of internal organizational resource coordination and top-level management support. Practically, this means that the general success of strategic human resource management depends on the effective coalition-building environment within the company that increases human resource management flexibility on all levels.
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Conclusion: competences needed for strategic human resource management
Thus, taking into account all above mentioned, it is possible to conclude that the process of globalization exposes a number of problems that a human resource manager needs to overcome. In this respect, it is extremely important to develop competencies which could be really helpful in overcoming the existing barriers and problems. Basically, specialists10 provide the following recommendations to effective strategic human resource management in the new conditions of the globalization. First of all, a human resource manager needs to possess skills and abilities to be able to control and regulate the functioning of the international network of the company by means of reaching agreement and mutual understanding with all employees, effective conflict management, implementing innovative management. Also, it is important to develop skills and abilities to promote the managerial competence in the field of creative human resource allocations. A human resource manager should be able to choose the most effective strategy and negotiate with other employees and his/her colleagues in order to build up effective relationships within multinational organization. Furthermore, it is necessary to develop and promote common set of values, principles of work and strategies that would be accepted by the company’s personnel. In such a way, it will be possible to reach cohesion of the functioning of the entire company and all its units. In this respect, a human resource manager should pay a particular attention to strategic rationalization that can help to unite the organization and make employees feel as if they are a member of one team. Naturally, a human resource manager should be a successful leader in order to meet the major objectives of his/her work in the new conditions of work when globalization defines the strategy and policy of a human resource manager. Finally, it is extremely important to develop universal competences that could be applied in different fields. In such a human resource manager will easily cope with the specific problems of each unit within the network.
Thus, taking into account all above mentioned, it is possible to conclude that the process of globalization exposes a number of problems that a human resource manager needs to overcome. In this respect, it is extremely important to develop competencies which could be really helpful in overcoming the existing barriers and problems. Basically, specialists10 provide the following recommendations to effective strategic human resource management in the new conditions of the globalization. First of all, a human resource manager needs to possess skills and abilities to be able to control and regulate the functioning of the international network of the company by means of reaching agreement and mutual understanding with all employees, effective conflict management, implementing innovative management. Also, it is important to develop skills and abilities to promote the managerial competence in the field of creative human resource allocations. A human resource manager should be able to choose the most effective strategy and negotiate with other employees and his/her colleagues in order to build up effective relationships within multinational organization. Furthermore, it is necessary to develop and promote common set of values, principles of work and strategies that would be accepted by the company’s personnel. In such a way, it will be possible to reach cohesion of the functioning of the entire company and all its units. In this respect, a human resource manager should pay a particular attention to strategic rationalization that can help to unite the organization and make employees feel as if they are a member of one team. Naturally, a human resource manager should be a successful leader in order to meet the major objectives of his/her work in the new conditions of work when globalization defines the strategy and policy of a human resource manager. Finally, it is extremely important to develop universal competences that could be applied in different fields. In such a human resource manager will easily cope with the specific problems of each unit within the network.
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