Changing Environment of HRM

by Sree Rama Rao on October 8, 2009

Changes are occurring today that are requiring human resource managers to play an increasingly central role in managing companies. These changes or trends include globalization, changes in the nature of work, and technology.

Globalization Trends:

Globalization: The tendency of firms to extend their sales, ownership, and / or manufacturing to new markets abroad.

Globalization is the tendency of firms to extend their sales, ownership, and / or manufacturing to new markets abroad. Sony, Apple, Zara, Nike, and Mercedes Benz are some firms that market all over the world. Indian firms like Infosys, Wipro, TCS, and Satyam serve customers around the world by developing software cods and supporting their IT systems. Tata Steel and Mittal Steel have acquired steel plants around the world through competitive bidding and have gained a place among global manufacturers. Companies like GE, American express, dell, and Google have located back office support operations in India and other countries from where they provide service to global customers. Toyota produces Camrys in Georgetown, Kentucky, Dell produces computers in China. In turn, globalized markets and production mean that globalized ownership makes more sense.

Companies expand abroad for several reasons. Sales expansion is one. Thus, Google recently expanded its China presence by initiating its Google China instant messaging service there. Wal-Mart is opening stores in South America. Dell, knowing that China will soon be the world’s second highest market for PCs, is aggressively building plants and selling there.

Firms also go abroad for other reasons. Some manufacturers seek new foreign products and services to sell, and to cut labor costs. Thus, Florida apparel manufacturers design and cut fabrics in Miami, and then have the actual products assembled in Central America, where labor costs are relatively low. Sometimes, it’s the prospect of forming partnerships that drive forms to do business with firms form abroad. Several years ago, IBM sold its PC division to the Chinese firm Lenovo in part to cement firmer ties with the booming China market. Whatever the reason, doing business internationally is big business today. For example, the total value of US imports rose from $ 799 million in 1994 to $ 135 billion recently; exports rose from $ 702 million to $88 billion in the same period.

Globalization’s implications: For business people, globalization’s essential characteristic is this: More globalization means more competition, and more competition means more pressure to be “world class” — to lower costs, to make employees more productive, and to do things better and less expensively. As an expert puts it, the bottom line is that the growing integration of the world economy into a single, huge marketplace is increasing the intensity of competition in a wide range of manufacturing and service industries.

Because of this, globalization brings both benefits and threats. For consumers it means lower prices and higher quality on practically everything from computers to cars, to air travels but also the prospect of working harder, and perhaps having less secure jobs. Job outsourcing having employees abroad do jobs that, say. Americans or Europeans formerly did is perceived as one such threat in the United States or Europe, while it generates employment for skilled personal in countries like India and China. For example, IBM shifted several hundred system analysis abroad. Between 2005 and 2015, about three million US jobs, ranging from office support and computer jobs to management, sales, and even legal jobs, will likely move offshore. For business owners globalizing means benefits like reaching millions of new consumers, but also the considerable threat of facing new and powerful global competitive at home.

Both workers and companies therefore have to work harder and smarter than they did without globalization.





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