Human Resources and the Global Economy

Chapter 4 of Human Resource Management in a Business Context (2nd Edition) by Alan Price - published by Thomson Learning

Contents

Objectives

The purpose of this chapter is to:
- Outline positive and negative aspects of the globalization of trade and production that affect human resource management.
- Provide an overview of the HR implications of economic growth and stagnation.
- Critically evaluate the importance of regional trading blocks and multinational companies in the process of globalization.
- Highlight human resource issues specific to developing countries.
- Investigate the roles of supranational organizations such as the International Labour Organization and the European Union regarding the management of people.

Globalization

International human resource management

Trading blocks

Economic growth and employment

The developing world

Multinationals and global competition

Supranational organizations

The European Union

The International Labour Organization

Summary

Human resource management takes place within a business environment that is increasingly global in its reach. Globalization is a hotly debated subject with many implications on the practice of HRM, both within and between countries. The allocation of human resources depends on comparative issues such as international competitiveness and productivity, factors that are themselves dependent upon a wide range of variables. Foreign inward investment and subcontracting can bring benefits in terms of increased employment opportunities, earnings and economic development but this may be at the expense of comparatively low pay, poor working conditions and denial of employment rights. However, along with a trend towards reduction of trading barriers and encouragement of international trade, there is an increasing call for worldwide regulation of labour issues.

Further reading

There are numerous books on globalization, many with a markedly political agenda. The Silent Takeover: Global Capitalism and the Death of Democracy by Noreena Hertz (published under the Heinemann, Arrow and Free Press imprints, 2001, 2002) takes a highly critical view of the uncontrolled behaviour of multinationals in the globalization process. Globalization and Its Discontents by Joseph E. Stiglitz (2002 - published by W.W. Norton) adopts an all-round view of the process of globalization. Globalization - The People Dimension: Human Resource Strategies for Global Expansion by Stephen J. Perkins and John Banham (2000 - published by Kogan Page) takes matters further than our discussion by considering the practitioner implications of global HR. The Global Competitiveness Report 2001-2002: World Economic Forum (2002) by Klaus Schwab, Michael E. Porter and Jeffrey D. Sachs is the latest in a regular series on international competitiveness published by Oxford University Press. The Maquiladora Reader: Cross-Border Organizing Since NAFTA (1999) edited by Rachael Kamel and Anya Hoffman is a union-minded text published by the American Friends Service Committee. Smart Sourcing: International Best Practice (2002) by Andrew Kakabadse and Nada Kakabadse takes a managerial perspective on wider subcontracting issues (published by St. Martin's Press).

Review questions

Problem for discussion and analysis - Change in Japan

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