Globalization, Human Resource Policies, Manufacturing Firms
Globalization has created a paradigm shift in the ways by which firms conduct their business. The convergence of world economies has minimized-and in some cases eliminated-both legislative and geographical barriers to international production and sale of goods and services. The flip-side of this process is the increased competition for world markets created especially by the threat of multinational firms to local firms (Garry & Litan, 1998). Local firms must find ways to compete and survive the threat of take-over and crowding out of the market by multinational producers who enjoy favorable economies of scale. This is effectively achieved by ways of in themselves creating this very economy of scale; expanding business operations helps them lower the marginal cost of production allowing them to therefore provide a favorable pricing policy within the market.
In achieving the aforementioned, firms must build up capacity. The attention of managers-and researchers alike-has been commonly directed towards assets in the sense of physical (fixed and current) and monetary assets (optimal capital structure) of the firm in achieving this objective. Perhaps as an oversight or of limited interest is the aspect of human resource and its contribution towards this end. Human resource policies usually come into light when matters of corporate governance and ethics in business practice are highlighted; and rightly so. A need therefore presents itself to examine whether the scope of human resource policies extend beyond the limited precincts of governance and organizational culture into its influence on capacity building in medium size manufacturing firms aiming to move to the next level of operations.
[...] How can such an optimal human resource policy be applicable to organizations within the same manufacturing industry? 1. Literature Review Globalization is the process of increasing connectivity between geographically distant places as well as the interdependence of both trade and the financial markets (Garry & Litan, 1998). Globalization can take ten forms: Globalization of markets - which is the elimination of barriers that limit cross border trade between countries or trading blocs, Globalization of production - the breakdown of the production process such that different components are produced in different countries where the comparative advantages in manufacturing said component are high Globalization of financial markets which is the integration of financial systems between countries. [...]
[...] Cognitive processes especially within middle level management are also attributed to improved performance of multinational companies (Garry & Litan, 1998). Internationalization means that the organization exposes itself to more risks and uncertainties due to the challenge of information asymmetry. The managerial team's ability to recognize and anticipate changes in the business operating environment-especially within the external environment- and subsequently, analyze the possible impacts of such changes to the organization is essential in adjusting the company's mentality therefore enhancing the firm's global strategy. [...]
[...] The human resource policy therefore appears that it be based on solid examinations of the job requirements within the organization and how the job context fits within the overall short term and long term vision of the firm (Kandula, 2006). This job analysis gives birth to an essential element of formal organizations-the organizational structure. The organizational structure is the spine of any formal organization. In addition to creating and listing the jobs within the organization, it helps to define relations between employees of the organization as well as relations with other external shareholders such as the suppliers, customers, and financiers (DuBrin, 2008). [...]
[...] Similarly, the impact of remuneration on performance was found to be greater at high levels of internationalization (Carpenter, 2011). Does this therefore imply that monetary compensations should be a focus for medium level firms seeking to expand their business across borders? Abraham Maslow's hierarchy model for needs identified five levels of human needs/wants including monetary, social, and professional. At the helm of this hierarchy is the concept of self-actualization, which refers to a state of individual fulfillment over how the individual has lived the course of their life (Cary L. [...]
[...] Another risk is that the financial performance data may not be reflective of the overall position of the firms with respect to their growth position. There might have been significant prevailing conditions both intrinsic to the organizations and within the aggregate economy itself that might have lead to the gross differences as indicated by the audited financial reports. This may produced a biased and inaccurate position as derived at from the analysis. A final risk is that the research itself may provide both data and conclusions that cannot be generalized to the other firms within the same industry. [...]
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