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Globalization and Standardization of Human Resource Management

by Suleman
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Human Resource Management [HRM] is the systematic and cohesive group of persons operating towards the full accomplishment of corporate priorities within a specific enterprise (Armstrong 2). It has to do with the jobs, growth of capacity, use, maintenance and compensation of workers in compliance with their terms of service and organisational priorities (Beardwell & Claydon 12).

The international aspect of HRM has come about mainly as a result of the emergence of international conglomerates with branches across the globe. Such large organisations have increasingly faced the challenge of applying their HRM regulations to different persons in different places governed by different laws and cultures. The HRM policies therefore ran into several bottlenecks caused by these prevailing differences which resulted in a review of some of the policies. Since there was still a need to maintain some kind of general standard of HRM policies that applied across the board, the idea of International HRM came up. This need was further enhanced by the process of globalization which enabled organizations to do business all over the globe, including in places they could not dream of reaching before (Beardwell & Claydon 13).

This paper explores the extent to which standardization of HRM policies has taken place across the globe. This will be done by examining the contribution of globalization to HRM policy standardization, the comparison of two different regions of the globe to gauge the extent of this globalization and a projection into the future of HRM practices.

Globalization and Standardization of Human Resource Management

Globalization and Standardization of Human Resource Management

The management of employees at all levels in a multinational company or conglomerate is referred to as strategic human resource management [SHRM] (K’Obonyo & Dimba 3). SHRM is significant because it takes into account the environmental factors in different areas and factors them into the policy of human resource management. An important environmental element to take into consideration is national culture. This is the sum total of values, beliefs and conventions that make one society distinctly different from another one.

For example the national culture of American is distinctively different from that of Saudi Arabia. America is a liberal society that is fully focused on such things as human rights, open market policies, equal opportunities and gender equity among other things. The environment in Saudi Arabia is more religion oriented with a massive influence of Islam on day to day life. Issues such as equal opportunity and equity are just emerging but are not as important as the Islamic influence (K’Obonyo & Dimba 3).

Consequently, successful human resource management policies in America may not work so successfully in Saudi Arabia. Emphasis on gender equity in the latter may raise more friction than it would in the former since certain roles are regarded as male roles that women cannot successfully handle. Attitudes are changing very slowly on the role of women as CEOs for example (Delery & Doty 802).

SHRM therefore comes in to take into account such disparities in culture so as to enable effective and successful policy frameworks for human resources in diametrically different cultural environments. Policies are shaped according to the cultural environment rather that against them. In any case it is not the aim of businesses to change the prevailing political environment but to adapt as much as possible for the smooth running of the business and maximal output in terms of profitability (Delery & Doty 803).

SHRM takes into account Cultural Value Dimensions. This term is used to refer to the empirical criteria used to determine the extent to which national cultures differ.  There are four such dimensions: power distance paradigms, uncertainty avoidance mechanisms, individualism-collectivism factors and masculity-feminity issues (Hofstede 42).

Power distance is the terminology for the extent to which the lower cadre employees in an organization accept and take it for granted that it is right to distribute power unequally (Legge 28). This means that the said employees strongly believe that their bosses should have all the power to make decisions with far reaching effects and that these decisions should neither be questioned nor challenged for the sake of the well being of the organization. The unit for measuring this paradigm is the Power Distance Index [PDI]. Countries that have been known to have a high PDI include Malaysia, Guatemala, Panama, Mexico and Sub Saharan Africa countries. Those with a low PDI include the US, Austria, Sweden and Denmark (Paauwe 1).

Uncertainty avoidance is the name given to the extent to which a society programs its people to deal with unexpected situations that may be viewed as a threat to their wellbeing. This concept is measured using Uncertainty Avoidance Index [UAI]. In countries such as Greece, Portugal and Guatemala have the highest UAIs, while Singapore, Jamaica and Denmark have the lowest (Bollinger 41).

Individualism is the term used to describe how a society has conditioned persons within it to depend mostly on themselves rather than on strongly bonded societal units for their survival. They thus maintain only loose ties with other individuals within the society. In such societies the individual begins to be self depended from a certain age and is no longer entitle to assistance from his parents or relatives but must find ways of fending for himself. This is as opposed to collectivism which is the system in which the individual depends on the community around him for survival while paying unquestioning loyalty to that community. Individualism is measured using the Individualism Index [IDV] and is highest in countries such as US, Australia and Great Britain. It is lowest in countries such as Guatemala, Equador and Sub-Saharan Africa (Elenkov 151).

Finally, masculinity refers to the extent to which society ascribes leadership and high responsibility roles exclusively to males. In such societies females play a more subdued role with their main concerns being emotional roles such as relationships, helping others the environment.  This is as opposed to the more feminine societies in which men also exhibit more tender tendencies which make them share in the more traditionally feminine roles. The Masculinity Index [MAS] is used to measure the extent of masculinity with countries such as Japan scoring the highest while Nordic countries like Sweden, Norway and the Netherlands scored at the other extreme end (Kanungo 41).

In the face of the foregoing it is quite obvious that multinational organisations are faced with divergent cultural settings in the different environments in which they operate. They have been exposed to these stark realities that have forced them to adapt their human resource ideologies to the different cultural environments in which they operate. This means that their policies of gender roles, remunerative differences between different echelons of staff differentiation and promotion systems have been forcefully oriented to the work environments. This because culture is fairly rigid and cannot simply be changed overnight (Milliken & Martins 431).

Nevertheless, the onset of globalisation resulted in a more intensive standardization of SHRM policies. Certain concepts such as the capacity building among staff, promotion after a given duration of service and job security were universally adopted, but the intricacies of gender roles, staff differentiation and working days and hours were left to the dictates of the immediate environment. As a result, there are more differences today in the HRM policies between different countries than there are standard practices (De La Torre 16).

Comparison Between Two Regions: United States and Japan

All indications discussed above show that there is a clear disparity between the North American and the Far East regions in terms of cultural orientation. This means that there are of necessity different approaches to the management of human resources in the two regions. This, as earlier stated, is because HRM in regions which are differently culturally oriented adopts different approaches that are readily compatible with the prevailing cultural situation (Pfeffer 61).

The US and other western European countries are the originators of most concepts governing HRM.  Initially there was an attempt to apply these concepts universally, thereby inadvertently imposing the western culture on other nationalities. Needless to say, this approach had very limited positive results, but resulted mainly in causing unnecessary tension and confusion (Kochan & Barocci 108).

One of the outstanding things about the culture of the US is the high extent to which there is individualism. American culture encourages individuals to leave the care of their parents at the age of seventeen and to start taking care of themselves then. Individuals are granted a lot of independence from then on and tend to make their own decisions as well as take responsibility for them (Kochan & Barocci 108).

In Japan, there is a similarity in the need to fend for oneself by late teenage; however, family ties remain strong almost for life with the extended family playing a great role in the individual’s life for as long as he lives. Japanese social structures remould human relations in terms of vertical family descent [tate-shakai). Also important are parent child relations [Oyabun-Kobun] and clan relations [Uji]. The individual therefore cannot exist alone but as part of a greatly influential social system or group [Shudan-shugi] (Dale 16).

Though these relations are more mythical that real in modern times; since all societies are changing fast including the once secluded Japan; they still play an important role in defining relations between individuals in Japan, especially among the older generation. In general, the Japanese maintain far much stronger social bonds between individuals than persons in the US. These bonds are further enhanced by social rituals such as the elaborate tea ceremony in which family members are invited (Burns 199).

Japan also stands out for having the most patriarchal system in the world. The male is given a central role right from the family all the way to important institutions like business firms and government. Though the wind of change has swept Japan and women are playing a more central role in crucial leadership positions, this change is coming relatively slowly (Kim 141).

The US on the other hand is much less of a male dominated society with roles shared between the sexes. All spheres of the society including corporate and political leadership, military work, engineering and even space aviation have a fairly equal distribution of males and females. Though the country still ranks below the Nordic countries in terms of the feminine role, its MAS index is still much lower than that of Japan which is ranks as the highest in the world (Kim, 29). 

One thing that has come to define Japanese existence is modern electronic technology. More and more labour roles have come to be played by machines and robots, all of which have been greatly integrated into Japanese culture. The robots have been accepted as part of the households that can afford them and play routine roles like cleaning and arranging things and even preparing simple meals. Some of these robots are now extensively used in industry to replace human labor on several routine jobs. The study and development of robots is something of a craze in modern day Japan. As a result robots have come to play an important role in HRM in the country (Hornyak, 81).

Americans of course pride themselves in being the greatest innovators of modern digital technology. After all it is in America that the Silicon Valley is found. However, the Americans have not adapted to the use of robots as much as the Japanese. The only area in which they currently outdo the Japanese is in the use of pilotless drone war planes. However this is technology that is still developing and is of much interest to country that has to maintain its status of the world’s sole superpower by constantly going to war, albeit outside their country. Polical pressure to avoid pilots being shot down, captured and humiliated before international TV cameras has highly motivated this drive (DeLanda 88).

However, like all innovators, Americans are not as good at mass manufacturing what they have innovated as they are at making more innovations (Cheney, 114). Consequently there are more Japanese cars in America today than American ones. Coming back to the point, robots do not play as major a role in American business life as they do in Japan.

It is also true that the Japanese go out of their way to ensure that they create situations that support the thriving of business in their country. Part of this effort is geared towards creating assurances for employees that they are secure in employment. Uncertainty avoidance is a major issue in the conducting of HRM affairs and the government as well as different firms do their best to ensure that employees are as comfortable as possible so as to ensure the maximal output in their work. For business firms operating in Japan therefore, The UAI must be very high if one is to keep employees and avoid running into trouble with the Japanese Ministry of Labour (Bankoff 77).

This is quite necessary considering that Japan is one of the countries which are highly prone to natural disasters. The problems include earthquakes, typhoons and active volcanoes. Faced with such problems, Japanese society cannot afford to create man made problems that impede business. Instead they invest heavily in technology that can predict disasters and greatly reduce collateral damage through timely evacuations and aftermath compensation whenever called for. Consequently, the UAI is high thus business thrives. The result of this effort can be clearly seen considering that Japan has had one of the highest thriving economies in the world second only to that of the US (Bankoff 78).

This is a shared quality. Americans strongly believe in the free market economy and do everything to ensure that employees have job security and social support whenever they do lose their jobs. Like Japan, Americans too have a very high UAI. They too share in the Japanese natural disaster problems. In fact, many of the hurricanes that invade America originate as typhoons across the ocean in Japan and vice-versa (Alexander 141).

Just like Japan, the US therefore cannot afford to generate home made problems that would make business survival more difficult after the periodical disasters meted out by nature. In fact, the US is so serious about making life predictable that they have invested heavily in the best possible technology that can predict weather accurately. In this way they minimize damage whenever a looming natural disaster is approaching by evacuating people and offering compensation. They also put up disaster proof buildings in the disaster prone areas (Alexander 141).

One more area in which the US is distinctively different from Japan is on the issue of Power Distance. In the US the power distance between the top executive of a company and its lowest paid employee is quite small. Americans love the freedom of expression and they exercise it. They go out of their way to get in opinions that are as diverse as possible on any particular issue. Because of this employees communicate quite freely with their employers and can safely dissent on issues without feeling too threatened. Moreover, few employees in the country will stick to a job unnecessarily if they do not agree with the prevailing policies. Courts are also quite responsive whenever employees sue their employers (Sturr, 151).

Japan may be highly advanced in other areas but on this one they are still worlds apart from the US. Hierarchical systems still reign supreme in Japan and free dissent is not as welcome. Japanese are by nature very diplomatic people and they would do their best to sound polite even when they completely disagree with what is going on. Power distance is therefore still relatively high in Japan (Totman, 123).

A common crosscutting phenomenon between the two regions is culture of having two or three jobs at a go. Many Japanese labourers currently work per hour and run form one job to another to make ends meet. This is very much the same situation in the US where the cost of living forces employees to juggle two or three jobs. This development has radically changed the way HRM operates today. People are less interested in permanent jobs and more interested in making as much hay as they can while the sun shines. This paradigm shift now has to be accepted as the reality that modern day employers and HR managers have to plan for and cope with (Sturr, 248).

Future of HRM Standardization

The analysis above goes a long way to prove that there are still great disparities between HR management in different regions of the world as dictated by the different cultural environments involved. However, there are also indications that globalization continues and different parts of the world share information, news, experiences and ideas more closely, cultures are beginning to resemble one another. A ready example is the concept of workers taking two or more jobs rather than just sticking to one as was traditionally the case (Meeding 243).

Culturally the world is coming together as well with some of the more conservative cultures being slowly discarded for a more liberal approach. Countries like China have experienced tremendous growth in the past few years due to they adoption of a free market economy, something that was not imaginable in the communist years of the past. This has resulted in changes in other aspects of life with a harder drive for capitalist wealth resulting in people becoming more independent and less dependent on the state or wider society. Though the country remains fairly rigid in its political system, it is obvious that with the information superhighway through internet social networking sites, even that is changing as well (Meeding 411).

Conclusion

At the moment standardization has not fully taken place in HRM policies across the globe. However, the world is changing as it grows smaller in terms of information flow and shared experiences. The human cause becomes increasingly interdependent and the problems more universal. It is not really rational to argue that at one point the world will become homogenious in terms of culture. But nevertheless, the standardization of HRM policies is clearly the indisputable reality of the very near future. All current trends point towards it.

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