In today’s society, corporations are making huge profits from customers on a daily basis, lining the pockets of upper management, CEOs, and owners. The Human Resource Department (also known as HR or HRM) is an essential part of any company as it aids in the training and development of employees.
The company is investing in its employees to maximize their benefits. One of the most expensive assets of a company is its human capital, which refers to the knowledge, skills, and abilities of its workforce (ITAP International, 2010). The success of an organization depends on this resource. In recent years, the Human Resource Department has become the nucleus or central part of a company. Human Resource Management serves as both the voice of employees and employers. The relationship between human resources and management is becoming more collaborative with HR executives earning a seat at the management table (U.S. Office of Personnel Management, 1999).
The primary functions of the human resource department are to provide professional services, establish recruitment processes, develop promotions, maintain selection standards, and communicate personnel policies to the entire company. The department also promotes loyalty and represents personal control over time by helping, advising, and consulting with employees. (McCormick, 2000)
Employees should view the human resource department as a neutral ground where they can take their complaints and seek help and information. They should expect a fair and impartial hearing while feeling comfortable that human resources will provide a learning theory environment of trust and confidentiality. (Robbins, 2003)
If the human resource management personnel are successful in fulfilling their duties, employees would not have problems with their expectations. The ultimate job of the human resource department is to prioritize providing for the needs of top management within the corporation before any other tasks.
Joseph Campbell once said, Economics and politics are the governing powers of life today…” (Campbell, 2006).
The main difference between domestic human resource management and international human resource management lies in the additional knowledge and responsibilities required for foreign operations. These typically include language barriers; local and national regulations governing business operations in foreign countries; currency exchange rates; career outlooks; company benefits and incentives; and most importantly, understanding the ethics and etiquette expectations of foreign business contacts (McNamara, C., 2007). The examination of political and legal factors affecting global human resource management is closely tied to international business practices.
Effective human resource management and business success go hand in hand. Hiring the best, keeping the business together, and making a large profit are all interconnected. In today’s global market place, increasing international competition demands an effective human resource management strategy to gain a competitive advantage. Companies entering global markets must recognize that these markets differ from their home country, such as America. Foreign investment varies by country and will determine how the company is built.
Political and legal factors can significantly impact human resource management in global markets. The regulations enforced by a country’s legal system can have a strong influence on how human resources are managed. The political and legal systems can determine the requirements for human resources, including training, pay compensation, hiring and firing, and layoffs.
The legal factor is concerned with what is considered legitimate behavior. For instance, in America, we strive to eliminate discrimination in the workplace. In contrast, other countries allow employees to have direct input on crucial decisions that affect them directly such as new strategies that could impact their hours, payment structure, hiring process or transfers.
This highlights the problem of navigating different political and legal systems when managing a global workforce.
The effective management of human capital will be pivotal to an organization’s ability to survive and thrive, according to http://www.anderson.ucla.edu.
Political and legal factors are affecting global human resource management. Human resource management became global when companies started shipping their products and building companies overseas. Business owners found it cheaper to manufacture products and offer services in other countries.
However, outsourcing jobs internationally raises questions about fairness for American workers who lose their jobs as a result. This can have a significant impact on their ability to support themselves and their families.
One of the jobs of human resources is to hire reliable and capable people who can achieve the company’s goals. To do this, potential employees must understand the goals set forth. If these goals are not met for any reason, it can lead to termination or even failure of the company.
Several political and legal factors affect global human resource management. Some political factors include government legislation, tariffs, trade restrictions and quotas, and environmental policies. Legal factors include employment law, description law, consumer law, and health and safety concerns.
Despite these business aspects of human resource management’s political and legal factors, customers remain the most important factor overall. Customers generate huge profits that help achieve a company’s overall goals. The best advertisement is word-of-mouth which provides free publicity or advertising.
The quality of a product or service determines whether negative or positive advertising weighs more heavily in its impact on customers.
Political factors refer to political decisions, conditions, events, or activities that can affect businesses. These factors can cause investors to earn less money than forecasted. The most common global political systems include democracy, totalitarianism, and mixed economy.
Legal factors associated with this problem include consumer protection, product guidelines, forming contracts, and liabilities. There is a high demand for international business lawyers who can understand how to use their skills and knowledge globally to combat legal factors related to global human resource management.
The purpose of the research is to explore the legal challenges faced by companies operating in multiple countries and identify effective strategies for addressing them. By examining case studies and analyzing current trends in international law, this research aims to provide insights into best practices for managing legal risks in a global business environment.
The purpose of this research is to gain a better understanding of the reasons for international business practices and hiring practices as they relate to political and legal factors affecting global human resource management. It is important to understand how international business practices are tied into human resource management, including the ethics of human resources and how they deal with political and legal issues in diverse ways. Common practices used in America may not be as effective in other countries due to diversity.Currently, there are several issues and perspectives affecting managing human resource management in America. These include changes in the business environment that have affected this type of management, issues that have escalated in importance over the last few years, and emerging concerns that need further analysis (Werner, 2007). Can American practices be merged with those from other countries to create a better policy?Although there has been growing interest in the transition of economies over recent years, documentation on the contemporary nature of human resource management in Central and Eastern Europe is lacking (Morley, 2008).Overall, understanding these factors can help us develop more effective global human resource management policies.
Globalization has been a part of history long before 1492 when Christopher Columbus discovered America. It is not necessarily a bad thing; it just means that the world is becoming more connected instead of being divided. When goods and services are produced in another country, we should view it as sharing our talents globally. We have done this unconsciously for years with cars, clothing, food, and more because we simply wanted what we thought was the best.
Americans may be bitter about globalization because we once depended on manufacturing plants, farming, and other ways of making a living. Jobs were once plentiful in the United States without any worries like those of today where money is tight and sacrifices are high.
Now that we are in a Technology Revolution controlled by computers, it seems to make things worse for those who do not have knowledge or experience using them. As a result, the digital divide” came into existence.
When it comes to outsourcing work to other parts of the world, the major markets include Asia, Europe, Latin America, the Middle East, and Africa. Although human resources have aided in the hiring practices of businesses in these countries, there are politicians who remain against globalization and want to create more jobs for Americans. Eduardo Porter’s article International Business; Outsourcing is Becoming a Harder Sell in the U.S.” states that a survey of 7,300 senior executives from companies worldwide found that approximately four out of five executives believe outsourcing is good for the global economy. This approval ratio was virtually identical across Europe, Asia and the United States and aligns with many economists’ views.
However, when asked about outsourcing’s effects on their own businesses specifically, executive consensus broke down. In Europe, 70% of executives said outsourcing was beneficial for business. In China this number rose to 86%, while India saw an even higher percentage at 97%. Yet in America – home to many successful globalizing companies – only 58% of executives believed outsourcing had either a very positive or somewhat positive impact on their company (Porter, 2004).
Scope of the Research
The scope of this research will aid in understanding how human resource management has evolved from being a personnel department. Additionally, it will demonstrate the United States’ leadership in Human Resource Management. Specific areas of political and legal factors that will be explored include International Trade Laws, compensation packages, labor laws, and cultural adaptation. The significance of this research lies in its ability to shed light on the evolution and current state of Human Resource Management practices.
The significance of this research is to acknowledge the importance of human resource management from a global perspective. Both human resource management and international businesses should be concerned about recruitment, selection, and training due to global and political factors. These factors determine whether or not a business will survive in the international market. The United States sets the foundation for human resource management, which is commonly known. There are 7 key trends influencing human resources:
- Globalization of human resource management calls for governance and compliance.
- Talent Management moves beyond the hype by achieving brand awareness through Employer Branding.
- Social Innovation drives smart working.
- Leadership and Organization development are crucial for success in today’s business environment.
- Addressing the global sourcing challenge is essential for companies to remain competitive in the global marketplace.
Key Performance Indicators: Managing human resources involves measuring the effectiveness and efficiency of human talent towards organizational goals (Lettink, 2009).
Definition of Terms
- Human Resource Management: The direction of organizational systems to ensure effective and efficient use of human talent for achieving organizational goals.
- Business Ethics: A form of applied ethics that examines ethical principles and moral problems arising in a business environment.
- Global Organization: A firm with corporate units in multiple countries that operate together on a global scale.
- Political: Concerned with or engaged in government politics.
Legal refers to actions or decisions that are based on or permitted by law. International pertains to the relationships between nations. Personnel refers to individuals who are employed in any work, enterprise, service, etc. Policies are general guidelines that focus on organizational actions. Benefits are indirect rewards given to employees or a group of employees for their organizational membership. Recruitment is the process of generating a pool of qualified applicants for an organization. Cultural factors refer to societal forces affecting the values, beliefs, and actions of a distinct group of people.
Review of the Literature
While reviewing the literature, it becomes clear that human resource management is one of the most crucial aspects within the business environment. Human resource management is a specialized field and plays a significant role in the success of any organization. Its primary goal is to ensure that human talent is used effectively and efficiently to accomplish organizational goals.
Human resource management has several roles to fulfill, including administrative tasks such as clerical administration and recordkeeping. Another essential role of human resource management involves managing HR activities and serving as a mediator between employees and employers. It also includes employee advocacy.
Human Resource managers should contribute to organizational results by keeping organization ethics in mind while conducting their duties at all levels (Mondy, 2005). Whether employees are working in a large corporation with 15,000 positions or small non-profit agencies with only 15 positions, they must be recruited, selected, trained, and managed effectively.
The four major tasks of Human Resource Management are staffing policy, management training and development, performance appraisal, and compensation policy. However; these tasks can be complicated by differences between countries in labor markets culture legal systems economic systems which lead to problems with citizens working abroad such as inability to adjust or family problems at home.
To overcome these challenges during employee selection processes organizations should focus on technical expertise along with cross-cultural expertise which will help them choose suitable candidates for their international workforce.
There are problems that arise when citizens of one country work in another, which can lead to failure. Such failures include the inability to adjust and family problems at home. Therefore, the selection process for employees needs to take into account not only technical expertise but also cross-cultural expertise. The increasing international competition highlights the need to effectively manage human resources in order to gain a competitive advantage in the global market. Businesses that choose to enter this market must realize that all markets are not the same as those in America. The rapid growth of international outsourcing also indicates a link between global competitiveness and HR management. Many companies operating solely within their own country have recognized the need for more global operations (Roberts, 2006). Investing in international business differs from country to country and determines how an operation will be built. It is important to understand political and legal factors affecting international trade and how they relate to domestic and international practices, as these factors can dictate requirements such as training, compensation, hiring, firing, and layoffs.
Globalization has led to more businesses operating in multiple countries. While some companies do not currently operate globally, many feel the need to develop a more global organization. When taking on this responsibility, it is important for companies to adopt a global mindset. Globalization represents a profound shift for many organizations, as it has evolved from trade and investment to the integration of global operations, management, and strategic alliances. This shift has significantly impacted human resource management (Roberts, 2006). The world is now a big marketplace without boundaries, making it crucial for organizations to approach HR issues from a global perspective.
In order to ensure an atmosphere of openness, a company must utilize the ideas and resources of the culture in which it operates. Additionally, organizations operating globally must comply with ever-changing tax, immigration, and other legal regulations. Accurate reporting of operations in all countries is necessary for compliance, as well as ensuring fair treatment of all employees. Organizations must also address differences between mature versus emerging markets and manage labor costs while continually focusing on the global financial crisis and its impact on the organization.
Globalization has a significant influence on organizations that compete for customers with high expectations for performance, quality, and cost. This pressure also affects human resource management functions by requiring adaptation to changing organizational needs and adding greater value (Friedman, 2007).
Global Human Resource Management faces challenges in adapting to different cultures, values, and management styles around the world. These factors must be addressed in order to conduct business globally. Political systems vary from country to country; American firms are accustomed to a stable political system with established legal practices, providing consistency for international businesses. However, other countries may have unstable political and legal systems due to military rule or dictatorship. Additionally, laws addressing employment discrimination and sexual harassment may differ based on religious or ethical differences in certain countries. Therefore, it is crucial for Human Resource Management to thoroughly review the political environment and employment-related laws before initiating operations in a foreign country.
Political and legal factors present challenges for global human resource management when businesses operate in foreign territories. Managing human resources locally is the common approach for international businesses, but this can create pressure on local HR management to develop policies that may not be suitable for the business or employees in that foreign territory. Many countries have turbulent and diverse legal and political systems, resulting in varying HR-related laws in terms of their character and stability. Compliance with laws related to wages, benefits, union relations, worker privacy, workplace safety, and others highlights the importance of HR professionals conducting a comprehensive review of the political environment and employment laws before commencing operations in a country (Roberts, 2006).
Cultural factors represent an important concern affecting international human resource management. Culture is a collection of community forces that affect the values, beliefs, and actions of distinct groups of people. Cultural differences exist between nations, as well as within regions based on religion or ethnicity. Convincing individuals from different religious, ethnic, or tribal backgrounds to work together in a global firm may be difficult in some parts of the world.
Many organizations that operate in the United States, Europe, and other countries are familiar with reasonably stable political and legal systems (Roberts, 2006).
On a global level, organizations are likely to grow even larger due to the rise of globalization. However, it has become increasingly difficult for human resource management to ensure compliance with all relevant personnel-related laws and regulations. To address this issue, many organizations have implemented international assignment programs. These programs are designed to ensure that no parts of the organization are overlooked, undermanaged or misunderstood. Failure to resolve these issues quickly can lead to damage to a company’s reputation.
Global human resource management faces challenges from political and legal factors when business owners expand into foreign territories. Managing human resources in foreign locations is not a simple task. Most international businesses take a local approach which may result in inappropriate policies for both the business and its employees on foreign territory.
There are many countries that function under turbulent and diverse legal and political systems. As a result, laws related to human resources vary in character and stability. Compliance with laws on wages, benefits, union relations, worker privacy, workplace safety, and others illustrates the importance of HR professionals conducting a comprehensive review of the political environment and employment laws before beginning operations in a country (Roberts, 2006).
Cultural factors also represent another important concern affecting international human resource management. Culture is a collection of community forces affecting the values, beliefs, and actions of a distinct group of people. Cultural differences exist between nations as well as within parts of the world based on religion or ethnicity. Convincing individuals from different religious, ethnic or tribal backgrounds to work together in a global firm may be difficult in some parts of the world.
Many organizations operate in countries such as the United States or Europe where reasonably stable political and legal systems exist (Roberts 2006).
On a global level, organizations are likely to grow even larger. With the rise of globalization, it has become increasingly difficult for human resource management to ensure compliance with all relevant personnel-related laws and regulations. To ensure that these rules and regulations are followed, many organizations have relied on international assignment programs. These programs are put in place to ensure that no parts of the organization are overlooked, undermanaged or misunderstood. If these problems are not quickly resolved, they can quickly lead to damage to a company’s reputation and brand.
Many countries function under turbulent and diverse legal and political systems. As a result, human resource-related laws vary in character and stability. Compliance with laws on wages, benefits, union relations, worker privacy, workplace safety and others illustrate the importance of human resource professionals conducting a comprehensive review of the political environment and employment laws before beginning operations in any country (Roberts 2006).
Cultural factors also represent another important concern affecting international human resource management.
Cultural differences bring about another concern affecting international resource management. Culture is a collection of community forces that affect the values, beliefs, and actions of a distinct group of people. Cultural differences exist between nations, and working together in a global firm may be difficult in some parts of the world due to cultural differences related to religion, ethnicity, or tribal backgrounds. Many organizations operate in the United States, Europe, and other countries with reasonably stable political and legal systems (Roberts, 2006).
On a global level, organizations are likely to grow even larger. With the increase in globalization, it has become increasingly difficult for human resource management to ensure compliance with all relevant personnel-related laws and regulations. To ensure that rules and regulations are enforced, many organizations have relied on international assignment programs. These programs are set in place to ensure that no parts of the organization are overlooked, undermanaged or misunderstood. Failure to resolve these problems quickly can lead to the destruction of a company’s reputation and brand.
Fortune 500 companies that conduct international business have been quite successful thus far. International business is a growing and competitive environment. Walmart, which uses global human resource management, is the number one Fortune 500 Company in 2010 with revenues totaling $408,214 million and profits of $14,335 million (CNN Money, 2010). Walmart became an international company in 1991 and more than 75 percent of its international stores operate under a different banner than Walmart. Walmart serves in 14 countries outside the United States with a total of 4,068 stores and more than 664,000 associates.
Walmart strives to ensure that every associate feels fulfilled, motivated, and empowered while building their career. The company’s human resource management objectives include finding individuals who can lead and motivate others, as well as those who understand the important role that career opportunities play in improving lives. Walmart’s employment needs are diverse and constantly evolving.
Walmart trains its human resource management staff on global human resource management. The objective of the course is to familiarize employees with the latest global trends, different cultures, and human resource management systems and policies. Management across borders requires global managerial staffing and cross-cultural decision-making. Walmart understands that people are key to their business, and they have a strategy in place for human resource management and development.
Employers are seeking flexible and adaptable workers, with a particular interest in the young and newly educated workforces in developing countries. As a result, many firms headquartered in developed countries now have a large proportion of their workforce located elsewhere. For example, the Ford Motor Company has half of its employees outside the United States, Philips Electronics has three-fourths of its employees working outside the Netherlands, and more than half of Matsushita Electric’s staff work outside Sweden. It is clear that developing a global perspective is no longer an option for many firms. Organizational structures that reflect and support globalization are becoming a necessity, as is having the workforce to staff them. Human resource managers can aid their organization’s transition into the arena of more intense worldwide as well as domestic competition (Schuler, 2010).
DESIGN OF STUDY
This study is broad and informative. Its design aimed to help individuals understand the global factors associated with human resource management. As with any aspect of an organization, there are certain guidelines and procedures that have to be followed. The role of international human resource management professionals is coming to the forefront as firms continue to globalize at a rapid pace. Businesses have realized that without attention to foreign markets and competitors, their prosperity and survival may be at stake. Information and communication technologies are transforming organizational structures and business processes; they are also breaking down organizational and geographic boundaries.
FINDINGS
During this research, the author discovered that many programs, industries, and popular businesses in the United States have rapidly growing global operations. The data collected and analyzed presented an array of evidence to support a direct correlation between Human Resource management and issues that organizations face when expanding globally. For businesses operating in multiple countries, it is vital for human resource professionals to understand the international context in which they work. This is more important today than ever before as businesses and their HR teams face demands for reorganization driven by the current economic downturn and challenges of applying these practices globally.
Shifting from a local human resource management role to one that involves operating on a global scale presents an abundance of challenges for all human resource professionals involved (Communicaid, 2010). Human resource management can be divided into two large areas: personnel management and development functions. This paper aims to shed light on development functions, which have been somewhat disregarded in traditional public personnel administration and international public administration education. The primary objective is to answer some of the most critical questions regarding human resources in a global perspective.
How can executives develop a multicultural management group? What role should human resources play in the management of negotiations and international collaboration? How can cross-cultural competencies be best developed? Globalization implies accepting that cultural diversity in management composition and style contributes to the competitive advantage of the global agency. Additionally, effective globalization calls for pursuing several management approaches that may seem contradictory on paper but can only truly be effective through their simultaneous and balanced application.
Global human resource management provides an organized framework for developing and managing people who are comfortable with the strategic and operational paradoxes embedded in global organizations while being capable of managing cultural diversity.
SUMMARY OF RESULTS
The collection of this research was based on all that I have discussed about global organizations, the importance of personnel, human resource management, and how it affects society politically and legally. There are many aspects in the business industry that individuals do not learn about and why or how it works. Many businesses do not truly understand the purpose of human resource management. Human resource management (HRM) is now the term commonly used in academic circles to encompass the range of policies and practices used by modern organizations in managing employees.
An organization’s HRM function focuses on managing people effectively during various phases of employment including pre-hire, staffing, and post-hire. During pre-hire planning practices are implemented to determine what types of job openings will exist in upcoming periods and necessary qualifications for performing these jobs. In the hire phase, selection practices include recruiting applicants, assessing their qualifications, and ultimately selecting those deemed most qualified.
In post-hire phases HRM practices are developed to manage people effectively once they have been hired. These practices aim to maximize employee performance and satisfaction levels by providing them with necessary knowledge/skills for job performance while creating conditions that energize/direct/facilitate employee efforts towards meeting organizational objectives.
Conclusion and Recommendations
Managing human resources in different cultures, economies, and legal systems presents some challenges. However, when done well, HR management pays dividends. A seven-year study in Britain of over 100 foreign companies showed that good HR management accounted for more of the discrepancy in profitability and productivity than did technology or research and expansion.
The most common obstacles to effective HR management are cross-cultural adaptation, different organizational/workforce values, differences in management style, and management turnover. Doing business globally requires adaptations to reflect these factors. It is crucial that managers and professionals view such concerns as unified when doing business and establishing operations globally.
Human resource management will be a key focus area as companies put strategies in place to cope with the financial and economic crisis. In the past 10 years, human resources have spent much time reinventing themselves to better serve businesses (Lettink, 2009).
There was a case study involving retirement, global human resource management, and service coordination. The study focused on the application of unparalleled global service to address country-specific problems. The success of this approach is driven by recognition of the client’s global business needs. Key factors in achieving success include:
Issues
A global manufacturing company required the services of a global actuary to oversee its retirement and other employee benefit programs in key locations worldwide. The company already had a relationship with Watson Wyatt in the U.S. and Canada and was impressed by their ability to assemble a team of experienced consultants globally. Based on their proven track record, the company chose Watson Wyatt to provide innovative, country-specific solutions for employee benefit design issues around the world.
Watson Wyatt has expanded its international capabilities and benefit expertise to cater to the global human resource management needs of clients. The company’s consultants are now part of a global team that maintains constant communication, relying on monthly meetings and effective tools such as Watson Wyatt’s BenTRACKTm (global benefit tracking system) and a closed Internet site for assignments. The Internet-based system provides valuable country profiles and access to most correspondence from around the world.
The team provides strategic employee benefit solutions that meet business needs in any location. For instance, in Mexico, Watson Wyatt provided human resource support for an acquisition by reviewing and analyzing existing compensation and benefit programs. In close coordination with the client’s Mexican locations, Watson Wyatt produced a comprehensive report in English and Spanish that addressed Mexico’s particular needs.
In Korea, the client sought Watson Wyatt’s help to integrate two additional acquisitions promptly. Currently, Watson Wyatt has ongoing projects with companies located in Brazil, Canada, Germany, Korea, Mexico, Netherlands, Sweden France and the United Kingdom.
The Results
Watson Wyatt’s global human resource management service helped the client redesign its employee retirement and benefit programs to meet changing business and employee needs worldwide. By aligning their benefit programs with both global and local business needs, the client improved its performance in the global marketplace (Watson, 2010).
Recommendations:
Overall, the author recommends the following:
- Further studies should be conducted on global human resource management.
- International human resource management must be strengthened to ensure that organizations fully comply with laws and regulations.
- To succeed globally, organizations need leaders who have lived and worked in multiple countries, speak different languages, and are open to multicultural, ethnic, and generational differences.
- The accessibility of telecommunications should be increased while the cost of telecommunications should be decreased.
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- Note:The same source is repeated twice.
- Note:The same source is repeated twice with different pages.
- Note:The same source is repeated four times with different pages.
