Introduction
Human resources processes and practices are essential to encourage well-being and progress and maintain the positive image of an enterprise. It is critical that human resources processes are implemented according to the generally accepted guidelines and measures (Tarique et al., 2016). When a company develops its processes in foreign states, internationalization considerably influences human resource administration as every country has its own culture and history-based standards. Therefore, enterprises should apply various adaptive HR tools to recruit, educate, engage, and maintain the staff dispersed across multiple nations.
Employees are the most valuable asset for each company, regardless of its size, structure, and type of management. The resource-based theory states that an organization’s resources are a critical predictor of its competitiveness (Pucik et al., 2017). It also posits that employees are the main resource and a valuable asset for an organization. Internationalization affects HR practices and transcends both present and prospective personnel, while the company expands its business to the neighboring shorelines. To support internationalization, the HR department has to provide more assistance to employees as they relocate internationally to new roles. The influence of globalization can be positive, as it is connected to the standardization of HR policies, bringing new benefits to the unity inside an organization. Nevertheless, it also poses threats to unique cultural characteristics that each country possesses. Therefore, globalized HR practices can be met with opposition. The purpose of this paper is to discuss the concept of globalizing HR policies and potential positive and negative outcomes of this process.
Globalization in HR
Globalization and internationalization tendencies indicate that the surrounding settings are becoming progressively integrated. This accelerating integration denotes universally appropriate connectivity in strategic business management practices across the national borders (Tarique et al., 2016). Globalization can also be defined as ongoing processes of convergence in all parts of the world. From such a standpoint, multinational corporations seeking to use internationalization as a ground for global growth must provide steadiness in running their systems through the head office to subsidiary companies in host nations. The universal HR systems are usually employed through a unified pattern that has a particular design, structure, and arrangement. Through this pattern, tested by numerous companies in varied conditions globally, internationalized HR practices streamline their functionality. However, achieving a decently quantifiable scope is unlikely if matters become convoluted in the end. Therefore, activities must be kept uncomplicated to produce the expected favorable impact. To achieve this point, every integral part of the HR procedures must be diminished to its most elementary layout.
Current managerial concepts and practices are rapidly propagated throughout businesses. This is especially true for business domains where multinational companies (MNCs) play a significant role. The impact of internationalization on organizations’ administration systems is a subject of a significant corpus of research. According to recent studies, MNCs influence human resource management approaches greatly. The role of international HR processes and regulations is less well understood. This is unfavorable because HR processes and rules are critical to staff effectiveness and a company’s competitive edge. Internationalization has far-reaching implications for the discipline of human resource administration generally. The continuing strategic HRM reconfiguration facilitates the entire company strategy. Moreover, HRM has a critical role in recognizing and enabling the distribution of material resources and allocation of talent throughout the firm. These HRM characteristics contribute to its advocacy of global HRM integration. In some cases, companies develop unique HR strategies that can then be adopted by competitive corporations, facilitating a global exchange of management practices.
Benefits of Global HR
Global integration does not necessarily suggest that all customers are approached similarly, but that employees are treated in one well-defined manner. This means that management with a broader perspective makes judgments on responding to consumer wants or customer segments. It also includes how the company is organized to assist its employees in attaining its objectives. Using Nokia as an example, Nokia’s logic is relatively prevalent despite the transnational corporation’s internationalization approach standing out for its amazing accomplishment. According to Pucik et al. (2017), Nokia’s competitiveness comes from its targeted Research and development innovation. The company connects product innovation, marketing, human resources, technology, and supply chain management, consolidating these operations on a worldwide scale. The unified structure of the company, therefore, leads to the increased perception of its brand as an entity that is not segregated into several international parts. In this case, a clear benefit of global HR arises – the standard procedures for approaching employees supports the view of the business as a large, but fully united organization.
The harmonization of essential operating processes is a fundamental component of the international unification of HRM practices and a potential motivator for increased collaboration and higher performance quality. According to Sparrow et al. (2016), globally shared norms make oversight easier, assuring more solid efficiency in quality and performance and adherence to security and ecological regulations. The global homogeneity of HR rules and procedures is a key component of operational harmonization, which enables the transition of the whole organizational structure to distant sites. Transnational corporations are continuously expanding the international HRM practices through standardization of HR procedures, although not to a substantial extent. As a result, global HR management integration is generally achieved due to MNCs’ efforts to attain uniformity in HR management implementation in foreign affiliates. At the same time, the establishment of uniformity in HR policies and practices is attained through the standardization of HR rules and procedures.
Another potential benefit that comes from globalized HR policy is the potential for interaction between employees on the level that encourages cultural integration and creation of a unique, company-based lexicon. Cooke et al. (2019) argue that the quality of HR standards in MNCs affect cross-unit cooperation and employees’ view of colleagues from other locations. Therefore, one can suggest that by developing HR policy that accounts for the unique feature of each branch while adhering to its standard structure, a company can increase collaboration among its workers.
Challenges Faced by Global HR
HR practices are urged to be straightforward and homogeneous and applied in typical globally adaptable templates. These practices should also have the capacity to be used internationally, aiming to grow the economic spectrum by streamlining business operations (Han et al., 2019). Such alignment helps to achieve the appropriate coordination, although it sometimes lacks total oversight as large corporations have to manage branches in several remote locations. Thus, it is vital to review some challenges that arise on the road towards developing a standardized HR policy.
The first challenge that global HR practice encounters is the unique culture and language that most countries have. Internationalization has become an increasingly complex problem and raises the interest of followers and critics. Its facets include economic forces and regional considerations such as language or heritage, which are usually analyzed in terms of the theory of cultural management (Reiche et al., 2019). For example, some large South Korean companies, while operating worldwide, retain the importance of Korean culture as a part of their business. This attention to the national heritage leads to businesses preferring hires of South Korean descent, relocating managers out of Korea to other countries (Kang and Shen, 2017; Lee et al., 2021). Such practice can lead to an internal conflict, especially if expatriation does not align with global HR practices of cultural inclusion.
This challenge should be analyzed in more detail as it currently exists in several countries and prominent international companies. Korean international corporations’ recruitment guidelines and procedures require expatriates for senior managerial posts. Furthermore, many native South Korean and Chinese people are employed at lower or middle managerial positions in South Korean transnational corporations that do their businesses in China. In contrast, greater parent nation residents are recruited to assistant commissioner positions (Kang and Shen, 2017). Interestingly, Kang and Shen (2017) emphasize that the job placement key points for Hyundai Motor Company are usually aiming to find out whether parent nation residents can operate repetitive and uninteresting jobs. This ability is in high demand, along with the capacity to work in a group. Moreover, such benchmarks can be applied to Korean professional conduct and are seen as reflecting the strength of character.
This approach is fixed in ethnocentric alignment resulting from various factors like subsidiary firms hiring more expatriates. On the one hand, Sekiguchi et al. (2016), and Bader et al. (2018), contend that South Korean multinational corporations have an ethnocentric alignment because more expatriates are recruited in subsidiary companies. On the other hand, Cabuay (2020) asserts that there had been a shift in South Korean multinational enterprises’ IHRM initiatives and procedures from ethnic nationalism to polycentrism. Native workers in subsidiary corporations are alleged to possess an improved comprehension of the specific regional context. As a result, there seem to be fewer South Korean expatriates. Notwithstanding the datum that the proportion of South Koreans at subsidiary corporations has diminished, according to Kang et al., (2017), there is still a robust connection between them and the headquarter because of the parental country orientation. Therefore, solid relations attend as a basis for operative oversight of overseas dealings in the East Asian region.
The robust ties in business circles and foreign language fluency are seen as a basis for operative oversight. When picking out a marker for choosing professionals in the US, the South Koreans aspire to follow the mentioned patterns. Although English foreign terms are becoming more widespread, linguistic conservatives are concerned about developing “Konglish” (Ryall, 2021). Owing to globalization, social media, and worldwide communication, more alien phrases are employed in South Korea (Ryall, 2021). This is accompanied by expertise in a global setting, which is alleged to reduce the likelihood of loss.
The municipal administration branches are established markets where the businesses hire native workers, although expatriate professionals’ employment requires official consent. Owing to such guidelines, parent nations are indulging with native workforces against expatriates (Özçelik et al., 2019). This attitude is based on a more general approach aimed at focusing on native comprehension and is also actualized since it profits government welfare. Interestingly, multinational corporations in South Korea tend to settle for ethnic nationalism when it considers the IHRM tactics (Kim and Kim, 2019). These aspirations are reflected in local regulations and procedures exploited in the recruiting process, according to the abovementioned validations offered by empirical investigations.
Korean multinational enterprises may be completely disinterested in modifying their residential regulations and procedures to comply with other countries’ social norms fully. According to the study by Haipeter and Jo (2021), more expatriates and parent nation residents are being hired, demonstrating that South Korean MNEs are changing from a distinct cultural to a pluralistic perspective in their recruiting strategies and procedures. This is reflected in the UK practices, where expatriates and native workers are being involved in tackling production concerns.
Another problem that may arise during HR globalization is the lack of flexibility of standard practices. In terms of transnational enterprises’ procedures, there are plenty of guidelines that can be regarded as multifaceted. Nevertheless, such versatility could be unproductive to a significant degree, and companies must foresee the need to readjust their practices in order to maintain each branch’s HR policy in line with local views. According to Kang and Shen (2016), internationalization is implemented through guidelines and practices in international corporations that can be utilized in the framework of various regional situations and settings in either of the company’s affiliates in an international setting. In other words, in international human resource management (IHRM), demonstrative processes and regulations could be implemented flawlessly in almost any place globally.
Given the above, there is a constant tendency that pertains to ramped up foreign expertise in the field in HCNs. Peltokorpi et al. (2019) suggest that these trends would be a propensity to minimize or enhance the utilization of native land expatriates in subsidiary companies. However, this would instead rely on the several requirements at distinct application levels. As native workers successfully handle processes as well as the capital competently maintains control, there would be augmented expectations on localization, therefore, increasing regional personnel would have more major responsibilities. This may explain why South Korean MNEs are actively changing from ethnic nationalism to polycentrism and incorporating this into worldwide HRM guidelines and procedures, such as Beijing Hyundai Motor Company.
Conclusion
In conclusion, the process of globalization in the sphere of HR practices can have several benefits for any business. The first potential advantage is that it improves inter-organizational collaboration. Moreover, having similar competencies makes it convenient for various divisions to work collaboratively. With standardized HRM, personnel have a common lexicon and viewpoint on the company, making coordination and interaction easier. If all entities follow similar HR policies, participants are far more likely to recognize the company as a whole rather than experiencing an us-and-them mentality. No less important, uniformity of practices can help create a sense of corporate equity, which can encourage more cross-unit cooperation.
Although global HR standardization may offer significant benefits, those initiatives frequently face challenges since they run as opposed to good motivations for localized HR customization. Furthermore, while it may be simple to centralize HR ideologies (or basic tenets) and overall policy proposals, precise procedures in multinational segments are inclined to deviate. In addition, there are several discrepancies in HR strategies regarding the benefits of global standardization, which might also influence the level to which practices can be changed. Overall, however, the benefits outweigh the drawbacks and some companies previously resistant to the ideas of globalization are changing their practices to adapt to the culturally diverse HR policy.
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