Globalization plays a very important responsibility in the economy of the world. The expansion, development, as well as speeding up of global interconnectedness are known as globalisation. The globalisation is the sharp expansion of trade as well as financial market (Giddens, 2018). The government also take initiatives by declining their power in the past decades. Due to the globalization the inflation rate is drastically decreased as well as it is maintained due to enhancement in global market (Hirst, Thompson and Bromley, 2015). The increase in trend of globalization the growth of GDP is also improved. Due to the outsourcing of jobs as well as enhance in the choice in the product in the global market, the rate of GDP of most of countries increases (Baylis, Smith and Owens, 2017). The rate of employment is also enhancing due to the globalization in the certain part of the world. With the growing business at the global level, the firms or companies get big opportunities to expand their business at level of international. It helps the companies to spread their roots or branches at international level (Crane and Matten, 2016).
In the following context there will be detailed discussion on the way globalization influence the performance of the companies as well as employee as well as the consequences of such impact on human resource department to handle the issues occurred due to globalization.
Globalization has contributed in the development as well as improvement of the GDP growth of the country, rate of employment as well as market at global level. The economic resources at global level are circulated all over the world that enhances the linkage of economy (Namini, 2014). The service, capital, as well as commodity have a free flow between the national boundaries. Due to the free flow, there is an increase in demand which in turn increase the production sector of the company (Osgood et. al., 2017). The increase in competition in the world market would force the companies to introduce their innovative ideas which will help in meeting the competition. It forces the companies to take some innovative steps to compete at global level. The competition among the business enterprises has resulted in the appearance of original tactical establishment alliance amongst the company’s crossways the globe (Bowen, Baker and Powell, 2015). To cope up with the challenge of global competition, the firms are more concentrating on enhancing their skills as well as generate the synergy by a wide variety of focused skills such as industrial, technology, commercial, monetary, administrative skills, as well as cultural skills according to the different countries as well as different continents (Solberg and Durrieu, 2015).
(Source: ATKearney, 2018)
The globalization provides new market to the companies which would help on increase their profit margin as well as target audience for their products (Gozzi et. al., 2015). The best example of the globalization is IKEA. In the present, it is one of the leading companies and known as world largest furniture retailers. In the past decades, the companies were only 10 stores outside of Scandinavia and the company annual revenue as only $210 million. In 2006, the company expanded their business due to globalization and spread their branches in 34 countries with 237 stores as well as their revenue was close to 17.3 billion euro. The IKEA group has employed approximately, 104,000 staffs in their company (Vahlne and Jonsson, 2017). The globalization enhance the trade, beside quick deal development, the fresh pattern on the worldwide operate are rapid growing. The formation of foreign-based affiliate by nationwide first as well as of host-country affiliate by foreign close relative companies has led to increase in intra firm deal. Globalization not only leads to affects the market, but the diversity of opinion from a variety of school of consideration exists in excess of the increase in elasticity of employee (Feenstra and Weinstein, 2017). The finest example might be the worldwide oil crisis of the 70s, increasing joblessness duty in the 80s, the neo-liberal harsh strategies to cull unions, the breakdown to use command –side Keynesian government to roar financial expansion, the rise in female employment and so on. The outsourcing has made developing countries such as India, China as a industrialized centre particularly for the motor industries with low-cost manual labour as long as one of the cut-throat compensation. The management strategy reform as well as growth against an amount has also facilitated this trend. Most of the manufacturing companies required cheap labour force that is low skills. Therefore, the requirement has moved from the US as well as Western Europe to developing countries such as Thailand, China, India, and Malaysia (Lam, Yeung and Cheng, 2016).
(Source: McKinsey&Company, 2018)
The Globalization provides an opportunity to the employees as well. In the recent scenario, the free movement policies increase the chance of employees to earn higher income as well as motivate the workers (Nica, Manole and Potcovaru, 2016). The job opportunities as well as option for the employees has also been increased which directly affected their income or earning capacity. In the global market, the requirement of skills has been increased which increase the demand of the employees as their supply are limited. Due to such demand, the mobility ratio of employees increases to fifty five per cent in the global market. The concept of globalization has bought about a very ferocious competition in employment (Vivarelli, 2014). Due to the reason, through globalization the highly trained professionals who are seeking lucrative career are massively migrants. The National Bank of Abu Dhabi is mong top ten in the list of the most secure bank in the world. It has also attracted many highly skills employee from different parts of the globe. It causes lot of job insecurity as any employees are likely to opt for the most qualifies. The tenure security in the global market has declined as well as the job has become less permanent due to the globalization. The main effect of this is that it increases the possibility of non-standard form of employment which include temporary as well as part-time employments. It has led to the adjustment in the bank employment policy which is now shaped to accommodate all form of employment form (Adam Cobb, 2016).
The globalization has led to domestic migrant workers. It has been estimated that, there were seventeen million migrants workers working in cities in the present scenario of which fifty five per cent were in industrialized, with an average monthly bare minimum salary of 500 Yuan (Huy, 2015). The reduced vocation exists in the shape of health issues, long hours, physical punishment, as well as child labour in some of the developing countries. The increase in the dependency of economic in capital as well as good and service market has enable the search of managers for extra suppleness in service relations to face worldwide rivalry as well as adjust quickly to rough markets. It has been seems to be transfer from industrialized business to additional on service trade. The industry of industrialized is more depend on the bendable manual labour employment (Beneria, 2011). The issue of unemployment as well as the defeat of jobs in develops countries are usually simultaneous with the globalization. The main motive of unemployment is that most of the international companies are moving their factories to just beginning countries. Due to amplify in the knowledge has resulted in extra fatalities of job (Lin, 2016). Other than, due to the mobilization of employees, the companies get high skills people from different companies at cheaper rate which cause unemployment in the nation of that company. Therefore China, Pakistan, Bangladesh, as well as India are such developing countries in which poor women are working. The turnover of employee is mainly characterized by the mobility of workers or employees that has been increased which greatly affected the change in worker-employer relationships within the workforce of organization. Due to mobilization of employees, the demand of the skilled as well as cheap employees is mostly required by the companies at higher level. Therefore, the increase in demand as well as limited supply causes the retaining issue in the companies (Co?ar, Guner and Tybout, 2016).
(Source: Wood, 2017)
The trade liberalization promotes intensity of labour on export as well as domestic-oriented activities which directly boost employment. The investment liberalization leads to larger inflow of information, technology, skills, capital, as well as various services which are deployed quickly as well as efficiently. the globalization enable the companies at worldwide, to access to the source of cheap raw materials as well as also enable the firm to be more cost competitive in their own as well as in global market (Adam Cobb, 2016). The seeking out the cheapest material help the companies to reduce their cost as well as increased their revenue which indirectly also increase revenue for the employees, it also increase revenue to the shareholders which increase the ratio of investment in the companies. In the long term, in increase in deal is also likely to lead to the formation of additional employment in all the countries that are concerned in globalization. The globalization has greatly affected the companies of United States. In the global market, the products of similar nature are available at cheap price which are being sold by US companies. The owner demand led to decrease in the manufacturing, which resulted loss of jobs in the manufacturing industries of US. The loss faced by the country is mostly due to trade with China. The market which is highly affected from such trading has been manufactures of clothing, furniture, electronic as well as textiles (Cozzi and Impullitti, 2016).
The globalization also increases the trend of merger and acquisition among the companies to gain access to the new market as well as fresh ideas rather absorbed their hard work on their own in trade actions. It has twisted certain trouble for an organization. There are certain trouble linked with merger and attainment one of which the retrenchment of staffs that becomes superfluous doe to good reason of operation as people required limited employees after merger and acquisition (Yamao and Sekiguchi, 2015). For example, in the service sector the activity of Merger and Acquisition between the years of 2000 to 2006 caused an aggregate declined in the employment. Due to such activity the experts predict a defeat of extra than 300,000 jobs in the banking division. When the negotiation of such activity was carried on, the employees of the concerned firms were subjected to several rumours which caused the insecurity about the future (Rao?Nicholson and Salaber, 2016).
(Source: NAP, 2017)
The advancement in technology due to globalization creates additional opportunity such as new merchandise and services enhance efficiency, sub-zero the competitors, price decline, as well as worldwide organizations. It help the companies to expand their business at global level; as well as put together cost-effective movement crosswise various locations in global with various subsidiaries, it produce an prospect for added employment crosswise sphere such as Uniliver being there in 150 countries s well as employed around one million people across 100 countries. The globalization enhances the expertise in information technology which creates millions of jobs transversely global with IT companies which can struggle crosswise worldwide (Kawakami, Barczak and Durmu?oglu, 2015). As per the economic policy, in the state Washington, the productivity as well as the salaries were not as grown as per expectation but globalization helps them to increase their income as well as the standard of living are also increases for billions of people across the world such as the public have a perception in USA about the concept of outsourcing, as according to them, the jobs are exported to low-cost economies which cause increase in the employment ratio at global level. With the help of globalization, the multinational companies would able to deliver high level of integrity as well as coordination within the organization through advancement management which help in retaining the employees for long-term (Rao?Nicholson and Salaber, 2016).
In the present era, the significance of competitive are directly linked to knowledge. Lot of emphasis is placed on the diffusion of knowledge as well as knowledgeable workers within the organization. Therefore, the companies mainly focused on the management of knowledge resource in the organization. In the recent scenario, the human resource management play a vital role in determining the competitive situation of the organization. They play an important role in creating, supervision, as well as developing the organizational capabilities which are necessary for challenging in the acquaintance wealth. The manager of human resource has to develop a well as make efficient team within the varied labour force, all through the association by recruiting, retaining as well as emerging individuals at all level as well as develop the commitment of employees towards the vision of organization. The multinational companies entail employees who can adapt to diverse culture, habits economic as well as political system and organization approaches who can able to work with other workforce or workers from different backgrounds. This has created great consequence to the HR manager (Bratton and Gold, 2017).
The changing business environment due to the globalization created great challenge to the HR manager as the companies are expanded at global level, therefore, the manager would feel challenge in managing the workforce at global level. In the fluctuating market it may create issue for the manger to coordinate with employees at global level. The work of the companies is also receive from global market therefore, the HR manager need to ensure the availability of employees who have the skills for global assignments during the recruitment process which would be tough for the manager to tackle, as any wrong decision would greatly affect the productivity of the company. the increase in competition due to globalization in international market also increase the responsibility of the HR manager to more focus on the productivity of the employees to compete in the competitive market (Karin Andreassi et. al., 2014) The market for the business has been spread broader for the company, therefore, if company need to target any market, then they need to follow the compliance as well as regulation of every country which are different from each other. The HR would face challenge in ensuring the legal compliance when conducting the business abroad. During the merger and acquisition, the insecurity among the employees would greatly been increased, the HR manager would feel difficulty in managing the insecurity among the employees which directly affect the employee relation with the company as well as affect the productivity of the company. During such period, the HRM manager also would face challenges in developing he initiative towards the management of employee moral as they are highly affected due to the process of merger and acquisition. The HR manager also need to ensure the productivity of the employee during the process of M&A which are highly affected from such process, it would be tough for the HR to manage the productivity as their moral already would be low during such process (Stone and Deadrick, 2015).
The industry as well as occupational shifts due to globalization also affected the human resource practice. In the fluctuating market, HR manager would face challenge in managing the workforce with flexible working patterns as well as measuring the performance of work to design the incentive based compensation. It would also be challenging for the HR manager to develop employment programs to motivate the employees at global level. The program would need coordination which affects the performance of the HR manager at greater level. the global market has huge skills which need to be identified by the HR manager according to the requirement of the company, in such process the HR manager would feel challenges while focusing on competencies during the hiring process because, they need to select the compete employees among huge number of employees. The HR manager faced challenges due to the corporate as well as cultural difference. The business tends to have their own cultures or way of operating but at the same time there is societal as well as cultural difference between people as well. The norms of culture greatly affect the workforce especially in relation to time spent with their families as well as ideas about the expectation for employment. Therefore, the management of cultural difference within the company would be tough for the manger of HR. They would find difficult in coordinating the people with different culture such a year ago, the CEO of major Japanese capital-good producer cancelled their important meeting to attend the funeral of one of the local dealer of their company. Perhaps the headquarters would have had the relevant European manager send a letter of condolence. This case represents the culture; difference between them in the organization (Ohmae, 1989).
(Source: Iwatani, Orr, Salsberg, 2011)
The globalization provide an opportunity to the organization to expand their business in other countries, it cause challenge to the HR manager due to the reason, while managing the employees over great distance the HR manager faces great challenge in communicating with their employees. Often, they must depend on the technology such as conference calling to communicate with them. The indirect communication with the employees would increase the communication gap between the organization and their employees as well as other members of management, the HR are not able to hatch the information as they could through direct communication within the organization such as several times, the U.S hands reached in to change the head of the activities in Japan as well as the crisp memos and the calls on phones created challenges for the company to communicate in effective manner which cause gap in the relation, decline in profits as well as the intervention grew worse (Brewster, Chung and Sparrow, 2016).
The foremost challenge which is faced by HR manager is to retain an employee in the organization. In the global market the demand of skilled professionals has been increased at greater level therefore, the employees have lots of opportunities to grab. In the present era, the ratio of migration is increased to 55 % which cause issues in the organization. Due to the increase in migration ratio, the cost of organization has been increased which is the serious issue. The HR manager faces big challenge in retaining the employees. Satisfying the employees is the tough task for HR which increase cost to the company in hiring new employees according to the requirement of the company (Clegg, Kornberger and Pitsis, 2015).
(Source: ResearchLeap, 2018)
The employment rules, laws, & regulations are very different from one country to another. We have to understand the working style of the countries which are also very unique. Businesses have to take care of corporate social responsibility which is on increasing trend and it differs from countries to countries Human resource need to identify new methods, ways and techniques and applied in unique manner in which business have the visibility while fulfilling social responsibility (Najam, Runnalls and Halle, 2016).
Human resource need to identify new methods and technologies across globe to apply the same in organisation to have upper hand advantage over competitor and to have more efficient utilization of resource. It enables the employees in such a manner that they are open for change which is keys to grow for the business. Human resource management has to maintain the balance between the wants and needs of the present as well as for the future. With the globalisation they have to take proactive approach in everything so that they are ready for the Future. Human resource department tales helps from their surroundings and try to create better work place environment , takes on the best practices which other part of world is using try to accommodate that so that better results can be achieved. They always strive for the best so that benchmark could be set for the future reference and company have the standardized approach towards the activities they are going to do in future. With the globalisation human resources face challenges in business while creating as well as maintaining the brand image and value of the organisation so that recognition and presence could be felt by others and visibility of the brand can be seen (Jackson, Schuler and Jiang, 2014).
Conclusion
From the above it can be concluded that, the globalization play a prominent role in the success of any business. Through globalization, the companies get opportunities to expand their business at global level to target maximum customers. Most of the companies such as IKEA expanded their business to earn maximum profit in 34 countries with more than 200 stores. In the recent scenario, the company is known as a leading company in the retail industry of furniture. The competition in the global market also forces the company to introduce their innovative idea to compete in the competitive global market. In the global market, there is huge demand for the skills professionals which increase an opportunity for the employees to increase their salary. The retention ratio of employees is quiet low as comparison to last decades due to increase in demand for employees in global market. It created an issue to the companies, as the increase in migration ratio increases the cost to the company for recruitment of new employees. In the whole process, the human resource plays a vital role. As the performance of the employees are mostly depends on the effectiveness of HR practices. The globalization created challenges for HR to retain the employees in the organization. Even though the HR manager face challenges in communicating with their employees at global level. These certain challenges need to be cope up by HR manager to increase the productivity of the employees which directly affect the overall performance of the company at global level.
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