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People Management and Work in a Global Context

People Management and Work in a Global Context

Question 2: In 2017 Chris Brewster stated that “convergence trends tend to reflect a narrow HRM approach that focuses on only the business case, while ignoring the institutions within a country.” Do you agree or disagree with him? Provide justification for your answer.

I somehow agree that convergence trends are presenting a narrow approach to the Human Resource Management (HRM) which seems to be focused on the business case rather than the individual country’s institutions. Tregaskis and Brewster (2006) argued that convergence is the creation of similarity amongst the different nations through industrialization. Further, the authors demonstrated that there is a continued debate to show whether or not the employment relations are converging or diverging. Nevertheless, Gooderham and Nordhaug (2011) stated that though Brewster (1995) did not explicitly say that the HRM is converging worldwide his explanation; nonetheless, brought out the commonality. However, in the midst of all this, the concept of Human Resource Management (HRM) gives a different explanation about the current HRM approach. According to Beer, Boselie, and Brewster (2015), the HRM that was founded in the past 30 years has continuously evolved from employees and social well-being to concentrate more on the economic value. Contrary, Godard (2014) argued that despite the evolution all countries such as those in the liberal markets have succeeded in maintaining autonomy with issues such as employee rights.The convergence trends have significantly distracted the HRM from its initial goal.

The globalization, ambition, and technological evolution to be a knowledge-based economy are the first aspects to cause HRM approach narrowing as many countries pursue all means to have a competitive advantage (Hirst, Thompson, & Bromley, 2009). Keane (2015 reprint) noted that development of the HRM in North America in the 1970s was as a result of seeking competitive advantage. The companies realized that human capital was the most critical aspect of their business and therefore, need to work on it. The Human resource comprises of the skills, knowledge, experiences, abilities, talents, and values that individuals have that make them unique within a national border. The human resource shows the national capability of the society to achieve the set goals (Marchington, Rubery, & Grimshaw, 2011). Further, Marchington et al. (2011) argued that the need to align the multi-networks is what has created uniformity in the HRM. In short, the HRM is narrowing because of the globalization which requires that countries have similar human capital.

Notably, having a skilled labor is not only essential to national development, but it is important to allow domestic competitiveness as well as deep international engagement. National human resource policies contribute to the global labor market since they offer the distinct skills, abilities, and knowledge (Bamber, Lansbury, & Wailes, 2004). In the past decades, HRM has become the most important aspect of business since the human capital is considered as the most significant factor of productivity. At the organizational level, the human capital is taken as the most important factor, and that is why there are continued development strategies such as training and development to maintain efficiency (Marchington et al., 2011). Kerr (1960) noted that industrialization facilitates convergence of global economies to adopt capitalist forms of production. Though the national economies are similar, employment relations between the countries remain distinct which contributes to divergence or convergence of the internal HRM practices. In short, the HRM is more of global business competitiveness.

All countries are seeking globalization in pursuit to fitting in in the economic context. Paik, Chow, and Vance (2011) observed that globalization is also impacting the HRM in pursuit of ensuring global business success. Globalization is becoming one of enduring debate in every country and more it is affecting the employment relation. According to Bell (1997), globalization has gained many definitions ranging from trade volumes to international economic integration. Further, globalization is seen as the creation of a global economy where there is the ultimate borderless economy, multinational corporations (MNCs), neoliberal markets, and even nationality. Just like in the other aspects of business, globalization has affected the employment relations. Bell (1997) further claimed that globalization led to two types of working relationship views which are Marxist and Neo-liberal. Neoliberal states that globalization led to civilization across the borders while Marxists believe that globalization has created oppressive capitalists. In short, globalization seeks to bring out commonality in all aspects including human resource in the global context.

Paik et al. (2011) observed that HRM is the most challenging issue when it comes to the convergence of the world business. The challenges are brought about by the fact that when firms are seeking global competition, then they have to develop comprehensive strategies that are coherent with it such internalization of the HRM. Companies strive to lower their costs in the best ways possible, such as standardizing the HRM to fit the global operations units. As a result, there are emerging global converging global HRM contexts across the borders. Gooderham and Nordhaug (2011) stated that HRM started in North America in the 1970s, where companies started viewing the employees as the strategic partners who could fuel the efficiency of the business if treated well. The inception of the HRM comes as an end to the Fordist era in the USA. This paradigm of the HRM sought to ensure that the firm’s performance was improved by cultivating on the worker’s performance through processes such as appraisal and rewards. Apparently, the concept of HRM in the USA was based on the unitary. Brewster (1995) observed that the European model of HRM was similar to that of the USA in that it sought to unite the HRM practices amongst the European Union (EU) members. The EU attempted to ensure that employees from all its countries are treated the same (Dehnenb & Pries, 2014; Brewster & Hegewisch, 2017). In short, just like within the EU, countries are seeking to homogenize the global business rather than their institutions.

On the other hand, the MNCs tend to make the HRM look like a business approach rather than a national framework. Evidently, the concept of MNCs is linked to imperialism; providing the raw materials for the home country. The MNCs operate and produce their products in more than one country and mostly engage in a global foreign direct investment. According to Bamber, Lansbury, Wailes and Wright (2015), the MNCs adopt the HRM from their parent country while operating in the new country. For instance, if a country does not support the use of trade unions than all its branches in the different countries will not despite the working conditions of the host country. For instance, the US owned MNCs seem to favor the liberal market economies (LME) employment practices such as being hostile towards the trade unions. On the other hand, the MNCs from German support coordinated market economies (CME) practices such as employee cooperation among others. Though the MNCs adopt some degree of the host country, the HRM practices majority seems to maintain their parent country practices. Over the years, the MNCs have produced various effects to the host countries’ economies. These effects include the creation of new employment opportunities, proper conduct of business, capital intensive technologies, new skill levels, significant research, and development, among others.

Further, the MNCs opt for globalization because it promises higher profits through exploitation of the foreign national economies. As a result, when these firms settle for employees in the host countries they seem to initiate practices that attract and retain them. However, the MNCs must maintain the local political and social values (Frenkel & Kuruvilla, 2002; Frenkel & Peetz, 1998).The recent trends of decentralization have placed the supervisors more away from observing the employee conduct which causes dire consequences and at the same narrowing the HRM concept. Entrekin and Chung (2001) stated it is the time that the western organization learns that other than the direct supervision there also other ways that could be successful in ensuring that the employees achieve success. The authors concluded that it is important that firms find the compatibility of their parent and host countries values so that their employees can be satisfied.

MNCs that are started in the Chinese country have to understand about the Confucian practice and more so incorporate it into their culture to enable the success of their production. MNCs mind about their production levels rather than the satisfaction of their employees in their host countries. McCarthy (2015) stated that there are numerous deaths in Foxconn resulting from employee suicide which raises concerns on how the company treats its employees. Foxconn is an Apple Inc. Chinese manufacturer outsources thus making it part of the Apple MNCs. Apple is US-based and therefore seems to impose its HRM practices in the host country in China thus causing the employee dissatisfaction. One of the policies is not talking to colleagues during work which may cause a lot of issues. Other matters that may raise concerns are the safety, overtime, and inability to join trade unions. In short, the MNC such as Apple must understand the Chinese culture to invest in their culture adequately.

Contrary, Walker, Brewster, and Wood (2014) argued that convergence trends are unlikely to narrow the human resource approach. The authors first described the Hall and Soskice (2001) models of the LMEs and CMEs. Accordingly, the LMEs are focused on maximizing the immediate returns and value of the shareholders, thus maximizing economic value. In such economies such as the US, the employees have weaker voices and less legislative employment frameworks. On the other hand, the CMEs which comprise economies such as the Netherlands and Germany have closer integration of stakeholders, legislations, and regulations. As a result, in these countries, the employees have more rights and access to vocational training. CMEs seek to have the best fit between the stakeholders’ needs and even though the liberalizations push them, their institutionalizations remain intact (Akkermans, Castaldi, & Los, 2009). In short, though there are convergence trends, the employment relations solely depend on the type of the model the country has adopted for its economic development.

Consequently, Festing (2012) agreed that the importance of human capital in the business is undisputable, however, there interesting facts that examine the diffusion and existence of the strategic HRM (SHRM). Evidently, the SHRM is based on the country’s economy; a critical look at Germany gives interesting facts. Iseke and Schneider (2012) and Festing (2012) observed that German has a CME, which is the rigid and formally institutionalized environment that offers varieties of capitalism. On the other hand, the UK and the US pride themselves in using the Liberal markets. Interestingly, German has the most powerful economy in the EU, which could be based on its greater emphasis on a coordinated and collaborative relationship while working. Similarly, Godard (2014) argued that though the notion of industrial relations describes the employment relations, there remain widespread versions associated with the trade unions and organizational behavior. In liberal markets such as the UK and the US, there are dominant roles of the HRM which in turn bring out new work practices among others that at least bring out distinct HRM. In short, the convergence trends are not sufficiently narrowing the HRM because many countries are maintaining their uniqueness.

Further, Frenkel and Kuruvilla (2002) argued that through the institutional theory through the logics of action can describe the employment relations within any particular country. For instance, India has a regulated and protective while China has a constrained, competitive and Philippines as a competitive and deregulated employment relations. These employment relationships in these countries are evidence of their unique history that has reflected on how they handle their employees. For instance, the institutionalization of the HRM in India can be based on the intense and lengthy industrial peace that the company has experienced over time. Clearly, despite the globalization, there are still differences on the employment logics within different institutions based on parent countries. In short, the HRM approach in various countries is based on their unique backgrounds, and not even the convergence trends are likely to alter these facts.

In conclusion, I agree that the convergence trends seem to narrow the HRM to business context rather than the institutions of the individual countries. First of all, the concept of HRM was founded with the need to develop human resources in levels that could boost competitive advantage between companies in the North America. Therefore, all countries are willing to undertake any necessary measures to ensure that their businesses achieve it including manipulating the HRM to fit in. The MNCs in particular fuel this notion since in most cases are business-oriented rather than employee satisfaction especially if they come from LMEs. Nevertheless, the convergence trends cannot succeed in eroding cultures and historical foundations which are the basics for most HRM. Countries such as China have strong traditions which, despite globalization will affect how they do business and employment relations.


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