International Hrm, Globalization Effects and National Business Systems

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Identify and analyse the relationship (in the context of HRM issues) between ‘Globalisation Effects’ and ‘National Business Systems’ – do you think national patterns are likely to survive during the first half of the twenty first century?

Globalisation is a term much talked about in the media, most often by economists. It is having an increasing effect on national business as companies find themselves adapting to increasing homogenisation across the globe. This comes about as a result of increasing numbers of businesses expanding internationally and therefore having to standardise, among other areas, their HRM practises in order to gain the levels of control required to operate competitively. This trend to a single global market is causing many countries and regions to loose their own individual HRM styles in favour of more global practices which better suit the demands of this market. This includes both technological developments, staffing and personnel development, however at the same time problems are being faced along the way as globalisation resistance factors come into play in many different forms. Stuart Wall (2004) describes this change. From the view of political scientists globalisation is a process that leads to the undermining of the nation state and the emergence of new forms of governance. From the sociologists viewpoint globalisation is seen in terms of the rise of a global culture and the domination of the media by global companies. This global culture is slowly becoming the expected norm and it may well be the case that companies that do not take note and make the necessary changes may be left behind in the race for global survival. Research carried out by the University of Manchester ( covering globalisation and staffing argues that different societies exhibit important social and institutional variation due to their differences in culture, polity, education systems and financial regulations and therefore embody different welfare regimes, labour market practices and capacities for state economic management. It is argued that these variations leave a distinctive imprint on the practices, which include HRM, carried out in particular national territories. However a one-dimensional view of globalisation is likely to result in only a partial picture at best.

‘Globalisation is a complex process which is not necessarily teleological in character – that is to say, it is not necessarily an inexorable historical process with an end in sight. Rather, it is chracterised by a set of mutually opposing tendencies.’ (Giddens 1990)

McGrew (1992) attempted to identify several of these opposing tendencies.

1. Universalisation vs. particularisation. While globalisation can make many aspects of modern social life universal it can also identify the differences between what happens in particular places and what happens elsewhere (the UK and China for example). However when these differences are highlighted this can lead to a resurgence of regional and national identities and the particular practices that come with this such as HRM. 2. Homogenisation vs. differentiation. While globalisation creates this trend towards sameness (or homogeneity) in products, processes and institutions it can also mean that general approaches must be assimilated within the local. For example international HRM is becoming more homogenous across the globe however it may still take on different forms in different places while still maintaining the same core standards. 3. Integration vs. fragmentation. Globalisation creates new global, regional and transnational communities that unite people across territorial boundaries. However it can also potentially divide and fragment communities, for example labour can become divided along sectoral, local, national and ethnic lines.

These insights into the opposing reactions that accompany increasing globalisation...
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