Oct 22, 2019 in Research

Globalisation and Hr Function

Executive Summary

Globalisation is controversial phenomenon as there is no common denominator in its definition. There are varied definitions that explain what specific professionals in the field of economics think. The globalisation has brought about a change in the functioning of the human resources on the planet. It has impacted the convergence and harmonisation in organisation structures, processes and strategies. The accelerated globalisation has caused alterations and new emergency trends in human resource management. Efficiency has seen improvement as a result of globalisation and thus, has led to reduction of staff. The use of modern equipment has pushed the organisation to minimise the number of staff required. Company employees are interacting with customers and stakeholders that have diverse cultural backgrounds. The companies thus have to recruit workers belonging to these cultures so that the operations in the respective nations can be simple and help to reduce expenses for training employees to comprehend the foreign languages. There is a push in the human resource function to enhance professional development. The organisations have to offer opportunities whereby employees should further undergo training. The training keeps the organisations at a competitive edge around the globe. Globalisation has forced the human resource to comprehend the labour laws in various nations where the company has operating premises. Failure to understand and adhere to such laws poses a threat to the company’s existence. Increased decentralisation has become effected in organisation for purposes of ascertaining proper managing of employees. Employees require managers from their local areas who are to understand their prevailing circumstances. Competition has been ushered into almost all nations since goods are distributed around the world with much ease. Thus, human resources function is to seek means with which to beat competitors. As such, the function has altered the recruitment competency levels to pick the best recruits in terms of education and experience.


Human resource means individuals working for a given organisation. Human resource function deals with employee management, taking them as crucial assets that facilitate the operations of other company’s assets. The function sees the hiring and creation of manpower with high efficiency in the risk minimisation and return on capital invested maximisation. Globalisation in business refers to the integration of the organisation, processes, functions and strategies into diverse products, cultures, ideas, and services. The diversity of globalisation has a considerable effect on employee management. It is significant for managers to understand the globalisation effects on the human resource to better equip their organisations. Current paper discusses the controversy in the globalisation phenomenon. It will also explain the manner in which globalisation has had effect on the functioning of human resource.


Globalisation can be said to be a controversial phenomenon because of its debated effects and numerous definitions of different people who perceive it differently. For instance, Roland Robertson, a sociologist has defined the term as compressing the planet and intensifying the consciousness of the entire world. The word has another definition as the commerce engine that catalyses increased living standards, developing country’s prosperity and transferring more wealth to first world countries. The International Monetary Fund also defined it as a factor that emphasises the growth of interdependency of economies around the globe via the increase of cross-border business, free capital flows internationally, and rapid technology diffusion. The definitions depict the varied effects. The controversy becomes clear as economists have never agreed on any given standard way of explaining the term. Simple explanation of the word is that it is the interaction between nations of the world aimed at improving the globe economy. The term was known as early as 1944. Nevertheless, economists began its application in the year 1981.

There are numerous ways by which globalisation has affected the human resource functioning. First, companies are now interacting and dealing with customers, as well as stakeholders that have diverse languages, cultures and social backgrounds. It follows that the managers have to hire or recruit employees from equally different backgrounds. The principle here is to acquire workers who can readily intermingle and express themselves freely to the customers and stakeholders. It is also worth noting that the diversity of employees promotes the introduction of new ideas and influence among companies.

The other effect that globalisation has on human resource functioning is the pushing for development of profession. This push relates to the provision of opportunities for furthering studies for workers. The organisations have the responsibility of paying their professionals’ fees in order to acquire more knowledge. They also ascertain that the human resource staffs attend conferences, seminars and workshops in order to get equipped with crucial skills necessary for handling issues resulting from globalisation. The resulting effect is that the companies benefit as the new acquired skills and understanding are employed in the business operations. Cost reduction is vital and so the organisation operates better with few well-informed employees. Competent employees steer businesses to the apex leading to abnormal profits.

The globalisation also puts an emphasis on training. Globalisation has come with new developments. The countries such as the US, Germany and China where only one language is spoken creates a business barrier since customers are increasing across global markets. A company, therefore, has no other options, but to teach its employees the foreign languages in order to understand how to handle customers speaking their respective languages. Under the same internationalisation, software has to be applied in selling of products through the internet. The companies have to establish a platform whereas the sales team has to comprehend how to use it to handle the emerging markets and new customer segments. This training offers a competitive edge to organisations that embrace it.


Globalisation requires the understanding of the management laws in all jurisdictions. The awareness and application of laws in diverse regions to a specific business is crucial for globalisation. There are labour and tax laws that organisations operating in the United States, for instance, have to comply with. There also laws that apply only to particular states, regions or nations. Selling products in Europe, for example, means that companies must execute a VAT on its goods or services. Hiring workers at the branch levels or locations might alter the minimum requirements on working hours, tax allowances and wages. Failure to know and utilise such laws has serious impacts on the business reputation and its financial well-being.

Globalisation has seen human resource acquire the characteristic of increased decentralisation. Decentralisation means having management taken to various countries of operations. Most businesses operating around the globe have changed the human resource management to that of decentralisation. The management has become localised in the respective countries of operation. It is evident that an American company operating in South Africa cannot effectively be managed from America. For instance, Coca Cola is a multinational company with roots in the U.S. However, the human resource functioning of the company in countries such as China, Britain and Kenya among others has decentralised human resource management.

Globalisation has increased competition in provision of goods. There are thousands of companies producing and selling similar and substitute products. Initially, local companies in their respective nations had little or no competition. Globalisation has made goods, as well as services move fast around the planet such so that in a day, goods produced in China could get to America depending on the urgency. This aspect has illuminated the need to have top quality employees from around the globe. The companies hire employees from any country that bear the required knowledge for the purposes of getting ahead of competitors. Competing firms in production also compete in acquiring machinery and top employees. It is survival of the best firm that can both afford and retain the workers with the highest competence and working experience. The companies that are leaders in employing and maintaining professionals stand a better round to beat competitors by far.

Globalisation has instigated the unfolding of novel and contemporary technology in terms of management. The firms can employ the expertise in production. The upshot is that less human force is required. The major objective of organisations is reduction of expenses. Any move leading to sufficient output while at the same time managing high quality is forever welcome. There is no need to have many workers incurring much cost whereas a new technology of embracing machinery is available. Machines have unprecedented abilities to produce much more than human power. The resulting product has low production cost hence can be sold at a low price, thus increasing both sales and profits. Therefore, organisations’ demand for numerous employees is undermined. Only a few with great command in the sphere of operating the machinery are required. Thus, globalisation has changed the way human resource used and managed as the managers manage smaller numbers of employees than they did in the past.

There are organisations that are rigid in accepting to employ professionals in their international businesses. They hence decide to hire employees mostly from their mother countries. Since the clients belong to the nation of operation, they have to embrace the cultures of the locals. The human resource would not guide the company employees to act like they do back home, but rather adopt the ways of the customers in order to attract them.

Outsourcing of core jobs is another effect of globalisation. Organisations have understood that they can manage effectively without having to do everything required in the production of goods. It is possible to acquire part of company requirements from other companies instead of engaging in so many activities that would overwhelm the human resource. For instance, Kenya Airways, a Kenyan airline operating throughout the entire world does not train its security personnel. The company outsources the services from other companies and pays them. The employees are never managed by the airline, but rather by the outsourced company.


To conclude, globalisation is much about interaction of the inhibitors in all corners of the planet, exchanging goods, cultures, and technology. The knowledge of the term and its application varies from one person to another. They perceive it differently and think that it affects the global community differently. Many individuals have moved to other countries and have even acquired citizenship as part of globalisation. Such persons have found numerous opportunities and are doing great in the sphere of business. The transition from one country to another is fast and efficient because of the modern transportation systems. Globalisation has increased the spread of ideas that have changed numerous lives. It has affected the functioning of the human resource because of the changing nature of businesses. The diverse cultures that have come together and their components have to be incorporated for effective performance. Managers have therefore, accepted the change and took advantage of the globalisation in order to perfect the organisation’s output and increase incomes. The options available are accepting the challenge to build the firm or failing and making the sink.


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