Process of Globalisation and How This Process Shapes Multinational Corporations

This paper considers the process of globalisation and how this process shapes Multinational Corporations (MNC). It will outline how globalisation is affecting MNC’s International Human Resource Management (IHRM) strategies at four levels, global, regional, national and organizational. It will also consider which approaches can be used to analyse the effects of globalizations on MNC, in particular cultural and institutional theories. Lastly, the differences and similarities in employment relations systems will be outlined and considered. Throughout, it will look at how various MNC’s have responded to the challenges and opportunities of globalization using specific examples.

Concept of Globalisation
The concept of globalisation refers to the process of international integration arising from the interchange of worldviews, products, ideas and aspects of culture (Al-Rodhan, 2006). While globalisation is said not to be a new phenomenon, the speed and extent of globalisation has increased significantly over the past 20 years. Much of globalisation has been controlled by MNCs, and is being referred to as one of the largest, if not largest forces, affecting world economies at present (Stevens, 2007). However, it is important to stress that “the relationship between globalisation and MNC’s is not linear but interdependent – MNC’s are as much drivers of this process of globalisation as they are driven by it” (Donnelly & Dowling, 2010). The process of globalisation has, together with the expansion of international trade and growth of international capital markets, created what has been refereed to as a “broadening, deepening and speeding up of world-wide interconnectedness” (Held, McGrew, Goldblatt, & Perraton, 1999).

Global, regional, national and organisational effects
In order to understand the significant impact of globalisation on IHRM strategies and practices, the complex interrelationships between global, regional, national, and organisational effects provide

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