Page 7 - DMGT548_GLOBAL_HRM

Global HRM

Notes Introduction

Globalisation is the process of international integration arising from the interchange of world
views, products, ideas, and other aspects of culture. According to the Levin Institute, the term
globalisation refers to the increasing connections people, companies and states are forming
around the world. The process of forming social and economic ties across vast distances is
nothing new historically; however, technological improvements and liberal trade agreements
have increased these connections greatly in contemporary times. Advances in transportation
and telecommunications infrastructure, including the rise of the Internet, are major factors in
globalisation, generating further interdependence of economic and cultural activities. With
globalisation, companies moving out of political boundaries have also enhanced the need for
human resource functions to go global.

In this unit, we will learn about Global HRM, the drivers of globalisation and also the variables
that moderate differences between HRM and GHRM.

1.1 Global HRM

With the advent of globalisation, organisations – big or small have ceased to be local, they have
become global! This has increased the workforce diversity and cultural sensitivities have emerged
like never before. International dimensions of business and the globalisation of business have
a significant impact on human resource management. All this led to the development of Global
Human Resource Management.

HRM refers to those activities undertaken by an organisation to utilise its human resources
effectively. Human resource management (HRM) as a business practice comprises several
processes, which used together are supposed to achieve the theoretical goals mentioned above.
These practical processes include:

 Workforce planning
 Recruitment (sometimes separated into attraction and selection)
 Induction and orientation
 Skills management

 Training and development
 Personnel administration
 Compensation in wage or salaries
 Time management

 Travel management (sometimes assigned to accounting)
 Payroll (sometimes assigned to accounting)
 Employees benefits administration
 Personnel cost planning

 Performance appraisal
Global HRM is the process of recruiting, allocating and effectively utilising the human resource
in multinational corporations across the national boundaries. Firms operating in international
markets face different conditions and competitions. Multinationals are characterised by an
interdependence of resources and responsibilities across all business units regardless of national
boundaries. These companies have to cope with large flows of components, products, resources,

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