Globalization and Competition Trends

Trends in HRM

The assumptions underpinning the practice of human resource management are that people are the organization’s key resource, and organizational performance largely depends on them, if an appropriate range of human resource policies and processes are developed and implemented effectively, human resources will make a substantial impact on firm’s performance. Human Resource managers have long played important roles. Working cooperatively with line managers, they have helped administer benefits, screen employees, and recommend appraisal forms. However, exactly what they do and how they do it is changing. Some of the reasons for these changes are obvious while some others are subtle. The trends shaping HR practices today include globalization, technology, deregulation, debt or “leverage”, change in demographics and the nature of work, and economic challenges.

Globalization and Competition Trends

Globalization refers to the tendency of firms to extend their sales, ownership, and or manufacturing to new markets abroad. Companies expand abroad for several reasons. Sales expansion is one. Some manufacturers seek new foreign products and services to sell, and to cut labor costs. For businesspeople, globalization’s essential characteristic is this: More globalization means more competition, and more competition means more pressure to be “world class” to lower costs, to make employees more productive, and to do things better and less expensively. Both workers and companies have to work harder and smarter than they did without globalization. Because of this, globalization brings both benefits and threats. For consumers it means lower prices and higher quality on practically everything from computers to cars, but also the prospect of working harder, and perhaps having less secured jobs. Roger et al believes that, in the next few years, many employers plan to offshore even highly skilled jobs such as sales mangers, general managers, and human resource managers. For business owners, globalization means potentially millions of new consumers, but also the considerable threat of facing new and powerful global competitors at home.

Indebtedness (Leverage) and Deregulation

Other trends contributed to this economic growth. Deregulation was one. In many countries, governments stripped away rules and regulations. In the United States, and Europe, for instance, the rules that prevented commercial banks from expanding into new businesses such as stock brokering were relaxed. Giant, multinational “financial supermarkets” such as Citibank quickly emerged. As economies boomed, more businesses and consumers went deeply into debt. The only way the country could keep buying more from road than it sold is by borrowing money. So, much of the boom was built on debt.

Technological