Culturalist and globalist perspectives in international human resource management

Globalization

Discussion Questions: Globalization and Multi-National Corporations

Question 1) Contrast the culturalist view of international HRM with the so-called radical globalisation-thesis. Please give examples of the associated HRM practices to underscore yout theoretical arguments.

Strategic Human Resource Management (HRM), concerns the approach taken by an organization toward the relationship it pursues with personnel as contextualized by the strategic elements defining the operation as a whole. This concerns all aspects of the utilization and application of human skill, labor and leadership. The dynamic produced between organization, leadership and personnel, the theoretical model states, must be approached with careful consideration of key characteristics of the organization and externalities of the industry and market. These externalities are of primary interest to our discussion. This is particularly so today as the world struggles in a state of sustained recession. The sharp contrast between this and the torrid global economic growth of just a decade ago extends a particular challenge to organizational leaders operating through a strategic HRM framework. Indeed, as the discussion here indicates, HRM calls for adaptability in the face of organizational change.

There are myriad theoretical constructs which are used to further deconstruct the implications of HRM and these tend to reflect the spectrum of often conflicting perspectives on globalization and its implications. Radical Globalization theories and Culturalist theories effectively demonstrate the complexity of the subject, comprising two essentially incompatible ways of understanding globalization. The former proceeds from a perspective of convergence, expressing the idea that the nation-state is in a phase of erosion whereas the latter proceeds from the idea that certain particularly powerful nation-states are inherently dominant in the process of globalization. To this extent, we can see that each of these is a distinct lens through which to interpret the outcomes and consequences of the trade liberalization which is currently taking place.

To this end, the theory of radical globalization inherently rejects the idea that any one cultural identity is responsible for the thrust of the international community. Instead, the view holds that private multi-national corporations are more directly in control of the form that globalization takes. Morley & Collings (2004) report that "proponents of the 'radical' globalization thesis argue that national economies are being overrun by an emerging system of global economic organization and control where decisions are made at the global level without reference to the nation state. It is argued that this is a reflection of the relatively limited ability of nation states to regulate the activities of these global conglomerates which will, in turn, lead to convergence of national economic policies, economic organization and management practices toward a single 'best practices' model." (Morley & Collings, 478)

It should be bore in mind that when Morley & Collings refer to a 'best' model, this is meant only to imply that a universality of practice is being approached which is based on the preferences of international corporation. In spite of the terminology, Morley & Collings recognize that this is a pattern which often carries grave consequences. One of the most prominent examples of this pattern is represented by the Wal-Mart corporation. Wal-Mart is a particularly interesting case for examination of Human Resource Management (HRM) principles in light of globalization patterns. This is true given its remarkable success as a retail organization and yet its continued struggles with a grotesque record in the treatment of workers in developing nations. Labor Relations is one of Wal-Mart's areas of greatest incompetence, but it is one of the world's largest retailers. Likewise, it is consistently cited as possessing one of the most troubling records for worker treatment amongst major globalization employers. Criticized for its exploitation of laborers in contexts where laws protecting worker rights are particularly flimsy, as well as cited for its resistance of union organization and campaigning, the consumer giant has helped to produce a 'best' model for global production which has considerable negative consequences for the way other corporations recruit, retain and relate to global employees. Indeed, Rosen (2005) reports that "Wal-Mart is now notorious for wage abuse, sex discrimination, and antiunionism. They impact all Wal-Mart's sales associates, from managers to clerks, and women in particular who comprise 70% of Wal-Mart's employees, most at non-supervisory levels." (p. 31)

In its emphasis on reducing the retail cost to the customer, the expense both to the quality of the employee and to the treatment of said employee have tended to be rather high. In spite of this, Wal-Mart has continued to enjoy massive financial success with little to no intervention on the part of the international community. And its enormity means that other retail organizations must engage similar labor practices simply to remain economically competitive. This produces what Morley & Collings call the 'Bleak House' effect, where the irrelevance of nation-states in creating regulatory oversight has allowed the interests of multi-national corporations to preempt all other priorities, including those relating to humanitarian interests.

As denoted at the outset of this discussion though, there is yet another view of globalization which considers Human Resource Management through a cultural lens. Though it regards globalization as no less destructive, it considers the impact less directly instigated by the actions of private enterprises. Instead, the culturalist view denotes through a perspective of divergence that there are complex racial, geographical and social forces at work, and that these are significantly responsible for the vagaries of international trade. In particular, where the radicalist perspective argues that the nation-state is losing its primacy in the global landscape, the culturalist view argues simply that globalization is allowing hegemonic nation states to further extend the pale of their influence over world affairs and, more particularly, over world resources.

The article by Ardalan (2008) contends that "globalization constitutes an irreversible process, and that Anglo-American norms and values underwrite the culture of the new world. Americanization is associated with globalization because the U.S.A. is the sole superpower. The global network of culture is the most powerful social and political force in the world. It is this global network of culture that Islamic republics are fearful of and forces them to separate their people from the modern world." (Ardalan, 518)

This points to what is certainly the most salient example of the culturalist imperatives of globalization, with the machinations of the War On Terror demonstrating the especially violent extremes which may be channeled through this mode of internationalization. The plenteousness of such commodities as petroleum in the predominantly Moslem Persian Gulf region has attracted the hostile interest of developed nations such as the United States and Great Britain, which have in turn used this interest as a justification to impose democracy, free market capitalism and constitutional governance upon selected states. This mode of globalization has been shown to carry clear cultural prejudices which place a higher prerogative on Anglo-American modes of government and economy.

Question 2) Explain and compare how the recruitment approach of a multinational corporation would vary looking at it from each of Perlmutter's different development stages. Please use real life or hypothetical examples to highlight your points.

Recruitment is an inherently difficult process, with the courtship, hiring and integration of new personnel often having a determinant impact on the culture and operational effectiveness of a company. This is made yet that much more challenging where multinational corporations are concerned. As the stages of development offered by Perlmutter denote, there is a particular sequence which must be adhered to in order to approach recruitment effectively. When taken from a multinational perspective, these stages reveal the complexity of personnel selection across a variance of cultures and contexts.

The article by Darrag et al. (2010) helps to frame this discussion by indicating that we may group "job analysis, job description, and person specification into one stage, following the HR experts' opinions identifying that all three are interrelated in the business environment within the pilot testing stage." (p. 100) In a multinational context, this produces the need for close consideration of several initiatives. Job analysis must be conducted with specific examination of local work customs, domestic living standards and other features of each site of development. Job Description must use channels which target desired demographics (whether internal or external to the company), must demonstrate an understanding of performance incentives, and must take into consideration worker expectations as these are distinguished in each country of operation. And Person Specification will revolve on producing application, interview and hiring practices in ways that recognize social and normative particulars of the culture from which workers are derived.

The stages of development help to suggest that the success of recruitment on a global level is directly tied to the ability of an organization to adjust to the specificities of the work culture. Darrag et al. remark on this ability through a Human Resource Planning construct. This theoretical lens proposes that on for Multinational Companies, the role of Human Resource Management supercedes what Darrag et al. refer to as line management. This means that such long-term such desired operational features as productivity, efficiency and low-turnover can be predicted by the approach taken to recruitment through the Human Resource department of an organization. The study by Darrag et al. uses HRM as a mode to identify several clear obstacles to effective recruitment on an international scale. A major point of concern for MNCs, the article indicates, is the difficulty of penetrating culturally ingrained models of hiring and promoting. In such contexts as Egypt, Iran and Taiwan, the article reports that nepotism remains a powerful force preventing the use of merit in recruitment situations. These are concrete examples of the culturally-bound challenges facing the international human resource manager.

The Human Resource Planning theory states that these challenges require an HR department that is formulated according to the cultural particulars of a host country. The article by Darrag et al. concludes that where MNCs are able to make adjustments through their Human Resource Management departments, host countries are likely to see greater economic benefits. Yielding this presumption based on its case examination of MNCs operating in Egypt, the article contends that "As the acquisition of skilled personnel would substantially help in personal, organizational, and national success; ef-cient and effective management of the human element would substantially help any economy like Egypt to prosper and handle its workforce unemployment problems (Price, 2007, p. 113; Armstrong, 2006, p. 35). This effective management would require restructuring basic HRM functions in the market to be set-up on ef-cient and effective bases and processes. One of such basic functions is recruitment." (Darrag et al., 101)

Here, Darrag et al. resolve that in accordance with the Human Resource Planning theory, MNCs must rely on highly dynamic, flexible and culturally specific HRM approaches in order to obtain the benefits of global expansion. Likewise, the theory extends to developing nations which often play host to these MNCs, denoting that these local economies are also the direct beneficiaries of pragmatically oriented HR strategies.

Question 3) Please discuss how the knowledge-based view of the firm applied to international HRM may inform and guide HR personnel in the practical planning and implementation of international assignments (expatriation).

The knowledge-based view of MNCs argues that the integration of personnel both from a firm's host country and from its primary base of operation will stimulate the development of a shared cultural, organizational and operational knowledge that can bring unification to a diffusely spread company. Today, it is not uncommon for personnel to be drawn from one pool and placed in the other in order to facilitate greater intimacy between operational aspects separated by geography and culture. This condition is also producing a pattern which as a byproduct has forged what is referred to as a 'knowledge economy.'