Surviving the Globalization Threat: Realigning Strategy for Success
Globalization has created significant changes
in the way businesses operate and compete in the global market. As a result,
Strategic Human Resource Management (SHRM) has become increasingly important
for organizations seeking to align their human resource practices with their
business strategies.
However,
globalization poses unique challenges to SHRM, and organizations must develop
strategies that leverage their resources to gain a competitive advantage. The
Resource-Based View (RBV) and the Social Exchange Theory (SET) are two
contemporary HR theories that organizations can use to overcome the challenges
of globalization in SHRM.
This blog
will explore the challenges that globalization poses to SHRM, and the use of
the RBV and SET in strategy formulation to deal with this modern-day issue.
Challenges of Globalization on SHRM
Globalization
has led to increased competition, making it challenging for organizations to attract
and retain top talent. The global marketplace has a limited pool of highly
skilled workers, and organizations must compete with other companies to attract
and retain these employees (Schuler, Jackson, & Tarique, 2011).
Additionally,
globalization has led to cultural differences, making it challenging for
organizations to manage a diverse workforce. Cultural differences can affect
employee motivation and productivity, leading to a decline in organizational performance
(Hofstede,
1980).
Contemporary HR Theories on SHRM
The Social
Exchange Theory (SET) is a theory that explains the relationship between employees
and organizations. The theory suggests that employees will reciprocate
organizational actions based on perceived organizational support (Eisenberger
et al., 1990). When employees perceive that their organization is supportive, they
are more likely to reciprocate by engaging in productive work behaviours.
(RBV- Source: MBA Knowledge Base, 2021)
The Resource-Based View (RBV) is another contemporary HR theory that suggests that organizations can gain a competitive advantage by developing unique resources and capabilities that are difficult to imitate (Barney, 1991). In the context of SHRM, the RBV suggests that companies can gain a competitive advantage by developing human resource practices that are unique and difficult to replicate.
The Use of SET in Strategy Formulation
Organizations
can use the SET to develop strategies that leverage their human resources to gain
a competitive advantage. For instance, an organization seeking to attract and
retain top talent can develop human resource practices that provide perceived
organizational support, such as offering competitive compensation and benefits
packages, providing opportunities for career advancement, and offering
work-life balance initiatives. Additionally, organizations can create a
positive work environment that fosters a sense of community and belonging,
leading to increased job satisfaction and retention (Rhoades
& Eisenberger, 2002).
The Use of RBV in Strategy Formulation
According to
the Resource-Based View (RBV), firms that possess resources and capabilities
that are valuable, rare, inimitable, and non-substitutable can achieve a
sustained competitive advantage (Barney, 1991). In the context of human resource management, this means that
organizations can gain a competitive advantage by developing unique HR
practices that are difficult to replicate by their competitors. For example, an
organization seeking to manage a diverse workforce can develop HR practices
that foster cultural diversity and inclusivity, such as cross-cultural
training, diversity and inclusion programs, and language training (Shen et al., 2009). Additionally,
organizations can develop unique HR practices that support their business
strategies, such as personalized employee training and development programs (Wright & McMahan, 2011).
Conclusion
Globalization poses unique challenges to SHRM, and organizations must develop strategies that influence their resources to gain a competitive advantage. The Social Exchange Theory suggests that organizations can develop reciprocal relationships with their employees by providing perceived organizational support. The Resource-Based View provides a theoretical framework that organizations can use to align their human resource practices with their overall business strategies. By developing human resource practices that are unique and difficult to replicate, organizations can gain a competitive advantage in the global market.
Reference:
Barney,
J. B. (1991). Firm resources and sustained competitive advantage.
Journal of Management, 17(1), 99-120 [Online]. Available at https://doi.org/10.1177/014920639101700108 [Accessed
on 16th April 2023]
Eisenberger,
R., Fasolo, P., & Davis-LaMastro, V. (1990). Perceived
organizational support and employee diligence, commitment, and innovation.
Journal of Applied Psychology, 75(1), 51-59 [Online]. Available at https://doi.org/10.1037/0021-9010.75.1.51 [Accessed
on 16th April 2023]
Rhoades,
L., & Eisenberger, R. (2002). Perceived organizational support: A
review of the literature. Journal of Applied Psychology, 87(4), 698-714
[Online]. Available at https://psycnet.apa.org/buy/2002-15406-008 [Accessed on 16th April 2023]
Schuler,
R. S., Jackson, S. E., & Tarique, I. (2011). Global talent
management and global talent challenges: Strategic opportunities for IHRM.
Journal of World Business, 46(4), 506-516 [Online]. Available at https://doi.org/10.1016/j.jwb.2010.10.011 [Accessed
on 16th April 2023]
Shen, J., Chanda, A., D'Netto, B., & Monga, M. (2009). Managing
diversity through human resource management: An international perspective and
conceptual framework. The International Journal of Human Resource
Management, 20(2), 235-251 [Online]. Available at https://doi.org/10.1080/09585190802670516 [Accessed
on 16th April 2023]
Thank you for sharing important information Hushmath , However, without globalization, we wouldn't be as advanced with our technologies and communications as we are today. Poverty and unemployment wouldn't be a global problem. It would be countries problem and countries wouldn't come together to address it, they would have to deal with it individually.
ReplyDeleteHow would the world without globalization look like? - Medium
medium.com
https://medium.com › how-would-the-world-without-glo.
Hi Nilushi! I appreciate your point of view on the advantages of globalization in terms of advancing technology and tackling global problems like unemployment and poverty. Globalization has in fact increased interdependence and international cooperation in tackling shared problems. It's vital to recognize, however, that there are drawbacks to globalization as well, including possible harm to local economies, cultural homogenization, and environmental issues. It's a complicated subject with benefits and drawbacks. Understanding the interdependence of our globalized world and the necessity for responsible and sustainable methods of globalization may be achieved by considering what the world would be like without globalization.
DeleteWell-discussed article on Surviving the Globalization Threat: Realigning Strategy for Success. Natter, E. (2020) Globalization has a substantial effect on the management and development of human resources when a corporation expands its operations into other nations. To be able to hire, train, retain, and support a workforce that is frequently dispersed across numerous nations with frequently differing cultural identities, businesses must take a wide range of practical adaptations into consideration. Departments of human resources must change the way they think and behave to account for technological advancements, foreign laws, and cultural variations.
ReplyDeleteThank you for your feedback Janaka! You've rightly highlighted the significant impact of globalization on human resources management, particularly in the context of expanding operations across different countries with diverse cultural identities. Adapting HR practices to address technological advancements, foreign laws, and cultural variations is indeed crucial for organizations to effectively hire, train, retain, and support a global workforce. It's an important reminder of the evolving nature of HR management in the face of globalization, and the need for strategic realignment to ensure success.
DeleteThank you for sharing your insights on globalization and its challenges. I agree that globalization has brought about numerous benefits such as increased access to goods and services (Lomborg, 2021), but it is also important to consider the potential downsides it could have on local cultures and economies (Bhagwati, 2004).
ReplyDeleteI appreciate your emphasis on building relationships and collaboration instead of viewing the world as a zero-sum game (Pink, 2018). This approach is critical in achieving success and mutual benefits in today's interconnected world.
Overall, your post provides valuable insights into how we can navigate the challenges posed by globalization and adapt to thrive in this globalized world (Friedman, 2005). Thank you once again for sharing your perspective.
Thank you for your thoughtful comment, Praveen! I'm glad you found the insights on globalization and its challenges valuable. You're right, while globalization has many benefits, it's important to also consider potential downsides, such as impacts on local cultures and economies. Building relationships and collaboration, rather than viewing the world as a zero-sum game, is indeed crucial for success in our interconnected world. I appreciate your feedback and thank you for engaging with the post.
DeleteWell discussed on the topic. By adopting the strategies, you have mentioned, businesses can survive the threat of globalization and succeed in the new world order. It requires a willingness to adapt, innovate, and collaborate with others to create a sustainable future for all.
ReplyDeleteHi Chathura! I'm happy that what was discussed helped you deal with the difficulties presented by globalization. True, firms must be flexible, innovative, and collaborative to succeed in the modern global economy. I appreciate your kind words and believe that we must work together to build a sustainable future. Thank you for your engagement!
DeleteGood effort, Huzair. However, I feel that this article does not adequately tackle the link between the theories cited and surviving the threat of globalisation for an organisation. It would make this article more thorough if you were to draw those connections and explore them further.
ReplyDeleteHi Thanuki! I understand your perspective and appreciate your input. While the article may not have delved into the link between the theories cited and surviving the threat of globalization in great detail, it aimed to provide a broad overview and highlight strategies for businesses to navigate the challenges posed by globalization.
DeleteAs globalization is a complex and multifaceted phenomenon, it requires a diverse approach to fully explore its impact on organizations. Nevertheless, the theories cited, along with the strategies discussed, can provide a foundation for organizations to adapt, innovate, and collaborate in order to thrive in the globalized world.
In future articles, I will certainly consider incorporating more in-depth analysis and specific examples to further explain the connections between theories and practical applications for organizations facing the threat of globalization. Thank you for your feedback, and I will strive to make my articles even more thorough and informative in the future.
This blog post does a great job of exploring the challenges that globalization poses to strategic human resource management (SHRM) and offers two contemporary HR theories, the Resource-Based View (RBV) and the Social Exchange Theory (SET), that can help organizations overcome these challenges. The post provides a clear and concise explanation of these theories and how they can be used in strategy formulation. The use of examples to illustrate how organizations can leverage their resources to gain a competitive advantage is particularly helpful. Overall, this article is a valuable resource for organizations seeking to realign their strategy for success in the global market.
ReplyDeleteHi Sarah! I appreciate your positive comments regarding the clear explanation of these theories and the use of examples to illustrate their practical applications. It's encouraging to know that the article is seen as a valuable resource for organizations seeking to navigate the global market. Thank you for your support!
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