With the advent of globalization, organizations – big or small have ceased to be local, they have become global! This has increased the workforce diversity and cultural sensitivities have emerged like never before. All this led to the development of Global Human Resource Management.
Even those organizations who consider themselves immune to transactions across geographical boundaries are connected to the wider network globally. They are in one way or the other dependent upon organizations that may even not have heard about. There is interdependence between organizations in various areas and functions.
The preliminary function of global Human Resource Management is that the organization carries a local appeal in the host country despite maintaining an international feel. To exemplify, any multinational / international company would not like to be called as local, however the same wants a domestic touch in the host country and there lies the challenge.
We may therefore, enumerate the objectives of global HRM as follows:
- Create a local appeal without compromising upon the global identity.
- Generating awareness of cross cultural sensitivities among managers globally and hiring of staff across geographic boundaries.
- Training upon cultures and sensitivities of the host country.
The strategic role of Human resources Management in such a scenario is to ensure that HRM policies are in tandem with and in support of the firm’s strategy, structure and controls. Specifically, when we talk of structures and controls the following become worth mentioning in the context of Global HRM.
- Decision Making: There is a certain degree of centralization of operating decision making. Compare this to the International strategy, the core competencies are centralized and the rest are decentralized.
- Co-ordination: A high degree of coordination is required in wake of the cross cultural sensitivities. There is in addition also a high need for cultural control.
- Integrating Mechanisms: Many integrating mechanisms operate simultaneously.
Global HRM and the Staffing Policy
Here also the role is no different i.e. hiring individuals with requisite skills to do a particular job. The challenge here is developing tools to promote a corporate culture that is almost the same everywhere except that the local sensitivities are taken care of.
Also, the deciding upon the top management or key positions gets very tricky. Whether to choose a local from the host country for a key position or deploy one from the headquarters assumes importance; and finally whether or not to have a uniform hiring policy globally remains a big challenge.
Nevertheless an organization can choose to hire according to any of the staffing policies mentioned below:
- Ethnocentric: Here the Key management positions are filled by the parent country individuals.
- Polycentric: In polycentric staffing policy the host country nationals manage subsidiaries whereas the headquarter positions are held by the parent company nationals.
- Geocentric: In this staffing policy the best and the most competent individuals hold key positions irrespective of the nationalities.
Geocentric staffing policy it seems is the best when it comes to Global HRM. The human resources are deployed productively and it also helps build a strong cultural and informal management network. The flip side is that human resources become a bit expensive when hired on a geocentric basis. Besides the national immigration policies may limit implementation.
Global HRM therefore is a very challenging front in HRM. If one is able to strike the right chord in designing structures and controls, the job is half done. Subsidiaries are held together by global HRM, different subsidiaries can function operate coherently only when it is enabled by efficient structures and controls.