ICCC OCTOBER 1999, BANGKOK.

THE CHALLENGES OF GLOBALIZATION AND THE ROLE OF HUMAN RESOURCES. Muhammad Aminu Bawa (1) D !uha " A#i ($) ABSTRACT
The current financial crisis, which has engulfed East Asia since July 1997 and has subsequently spread to Russia and Bra il, is one of the !ost pressing challenges facing countries and businesses in today"s global business en#iron!ent$ %lobali ation represents the structural !a&ing of the world characteri ed by the free flow of technology and hu!an resources across national boundaries as well as the spread of 'nfor!ation Technology ('T) and !ass !edia presenting an e#er* changing and co!petiti#e business en#iron!ent$ Two !a+or li!itations are obser#ed in the treat!ent of the twin issues of the responses to the East Asian econo!ic crisis and the co#erage of the literature on globali ation$ ,hile the response to the crisis has focused on !acroecono!ic aspects, the issue of globali ation has been addressed predo!inantly in and with respect to the de#eloped econo!ies of ,estern Europe, -orth A!erica and Japan$ This paper is an atte!pt to address these two li!itations$ .ince the hu!an factor is the &ey in the new era of globali ation (/assan, 19901 .i!s 2 .i!s, 1993), the pri!ary ob+ecti#e of this paper is to present a conceptual fra!ewor& for effecti#e !anage!ent of hu!an resources as a response to the growing interaction of globali ation and business perfor!ance$ Three central argu!ents are !ade in this paper$ (1) That a growing body of e#idence con#erge to suggest that changes ta&ing place in the global business en#iron!ent often are not acco!panied by co!ple!entary changes in hu!an resource !anage!ent practices leading to a situation whereby the failure of so!e fir!s is due to the !is!anage!ent of people rather than to proble!s with technical syste!s per se$ (0) That this is because organi ations ha#e achie#ed relati#ely low le#els effecti#eness in i!ple!enting .trategic /u!an Resource 4anage!ent (./R4) practices (/uselid, et al$, 1997) especially in e!erging econo!ies of .outh East Asia and other de#eloping countries li&e -igeria that are e5posed to the challenges and opportunities of globali ation$ (6) That in order to !anage e!ployees for co!petiti#e edge in a period of globali ation, hu!an resource personnel !ust possess co!petencies rele#ant for i!ple!enting such strategic /R4 policies and practices (Barney 2 ,right, 19771 /uselid, et al$, 19971 8lrich, 1979, 19991 8lrich, et al$, 1993)$ %uided by theoretical perspecti#es such as the fir!:s resource*based theory of co!petiti#e ad#antage (Barney, 1977, 19911 'rwin, et al$, 19971 ,right 2 4c4ahan, 1990) and e!pirical e#idence (;elery 2 ;oty, 19991 %ittle!an, et al$, 19971 /uselid, et al$, 19971 <eonard, 199=1 >feffer, 199?1 .chuler 2 Jac&son, 1977), this paper de#elop propositions draws i!plications for the strategic !anage!ent of hu!an resources to prepare organi ations for the challenges of globali ation$

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ICCC OCTOBER 1999, BANGKOK.

I. INTRODUCTION The current financial crisis, which has engulfed East Asia since ul! 199" and has su#se$uentl! s%read t& Russia and Bra'il, is &ne &f the (&st %ressing challenges facing c&untries and #usinesses in t&da!)s gl&#al #usiness en*ir&n(ent. +&st &f the res%&nse t& the financial crisis has f&cused &n (acr&ec&n&(ic as%ects and there is relati*el! little research &n the r&le &f hu(an res&urces. ,ec&ndl!, the issue &f gl&#ali'ati&n has #een addressed %red&(inantl! in, and with res%ect t&, the de*el&%ed ec&n&(ies &f -estern Eur&%e, N&rth A(erica and a%an. This %a%er is an atte(%t t& address these tw& li(itati&ns since the hu(an fact&r is &ne &f the .e! issues in the new era &f gl&#ali'ati&n /0assan, 19912 ,i(s 3 ,i(s, 19945. The %ri(ar! &#6ecti*e &f this %a%er theref&re is t& %resent a c&nce%tual fra(ew&r. f&r strategic (anage(ent &f hu(an res&urces as a res%&nse t& the gr&wing interacti&n &f gl&#ali'ati&n and #usiness %erf&r(ance.

Three central argu(ents (ade in this %a%er are7 /15 That a great deal &f e*idence has accrued t& suggest that changes ta.ing %lace in the gl&#al #usiness en*ir&n(ent &ften are n&t acc&(%anied #! c&(%le(entar! changes in hu(an res&urce (anage(ent %ractices leading t& a situati&n where#! the failure &f s&(e fir(s is due t& the (is(anage(ent &f %e&%le rather than t& %r&#le(s with technical s!ste(s %er se. /15 That this is #ecause &rgani'ati&ns ha*e achie*ed relati*el! l&w le*els &f effecti*eness in i(%le(enting ,trategic 0u(an Res&urce +anage(ent /,0R+5 %ractices /0uselid, et al., 199"5. This is %articularl! the case in e(erging ec&n&(ies &f ,&uth East Asia li.e +ala!sia and &ther de*el&%ing c&untries li.e Nigeria that are e8%&sed t& the challenges and &%%&rtunities &f gl&#ali'ati&n. /95 That in &rder t& (anage e(%l&!ees f&r c&(%etiti*e edge in a %eri&d &f gl&#ali'ati&n, hu(an res&urce %ers&nnel (ust

ICCC OCTOBER 1999, BANGKOK.

%&ssess c&(%etencies rele*ant f&r effecti*e i(%le(entati&n &f such strategic 0R+ %&licies and %ractices /Barne! 3 -right, 19::2 Cunningha( 3 ;e#rah, 19942 0uselid, et al., 199"2 <lrich, 19:", 199=2 <lrich, et al., 19945. >&ll&wing -right 3 +c+ahan?s /19915 c&(%rehensi*e the&retical fra(ew&r. f&r ,0R+, this %a%er de*el&%s c&(%etenc!@#ased research fra(ew&r. and draws i(%licati&ns f&r the strategic (anage(ent &f hu(an res&urces t& %re%are &rgani'ati&ns f&r the challenges &f gl&#ali'ati&n.

II. HRM ISSUES AND CHALLENGES IN GLOBAL MARA7ETS The c&(ing &f the 11st centur! gl&#ali'ati&n %&ses distincti*e 0R+ challenges t& #usinesses es%eciall! th&se &%erating acr&ss nati&nal #&undaries as (ultinati&nal &r gl&#al enter%rises. Gl&#al #usiness is characteri'ed #! the free fl&w &f hu(an and financial res&urces es%eciall! in the de*el&%ed ec&n&(ies &f Eur&%ean <ni&n /E<5, the N&rth A(erican >ree Trade Agree(ent /NA>TA5, &ther regi&nal gr&u%ings such as the Ass&ciati&n &f ,&uth East Asian Nati&ns /A,EAN5, the Ec&n&(ic C&((unit! &f -est African ,tates /ECO-A,5, the ,&uthern African ;e*el&%(ent C&((unit!, etc. These de*el&%(ents are &%ening u% new (ar.ets in a wa! that has ne*er #een seen #ef&re. This accentuates the need t& (anage hu(an res&urces effecti*el! t& gain c&(%etiti*e ad*antage in the gl&#al (ar.et %lace. T& achie*e this, &rgani'ati&ns re$uire an understanding &f the fact&rs that can deter(ine the effecti*eness &f *ari&us 0R %ractices and a%%r&aches. This is #ecause c&untries differ al&ng a nu(#er &f di(ensi&ns that influence the attracti*eness &f ;irect >&reign In*est(ents in each c&untr!. These differences deter(ine the ec&n&(ic *ia#ilit! &f #uilding an &%erati&n in a f&reign c&untr! and the! ha*e a %articularl! str&ng i(%act &n 0R+ in that &%erati&n. A nu(#er &f fact&rs that affect 0R+ in gl&#al (ar.ets are identified7 /15

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Culture /15 Ec&n&(ic ,!ste( /95 A&litical ,!ste( B the legal fra(ew&r. and /C5 0u(an ca%ital /N&e, et al, 1DDD7 49=5. C&nsistent with the sc&%e &f the %resent %a%er, &nl! &ne di(ensi&n is treated7 hu(an ca%ital /the s.ills, ca%a#ilities &r c&(%etencies &f the w&r.f&rce5. This is in c&ns&nance with the #elie*e that c&(%etenc!@#ased hu(an res&urce %lans %r&*ide a s&urce f&r gaining c&(%etiti*e ad*antage and f&r c&untries %r&f&undl! affect a f&reign c&untr!)s desire t& l&cate &r enter that c&untr!?s (ar.et /O?Reill!, 19915. This %artl! e8%lains wh! a%an and <, l&cate and enter the l&cal (ar.ets in ,&uth East Asia and +e8ic& res%ecti*el!.

In the case &f de*el&%ing c&untries, gl&#ali'ati&n %&ses distinct challenges t& g&*ern(ents, the %ri*ate sect&r and &rgani'ed la#&ur. These challenges, which (ust #e addressed thr&ugh a strategic a%%r&ach t& hu(an res&urce (anage(ent, include /15 Aartnershi% in ec&n&(ic rec&*er! es%eciall! in ,&uth East Asia /15 ;ealing with the E#ig #&!sF, the fund (anagers /95 C&ncerns &*er %&ssi#ilit! &f fraud in E@c&((erce /such as issues &f c&nfidence and trust5 and /C5 I(%le(enting %rescri%ti&ns f&r rec&*er! and gr&wth ta.ing in t& c&nsiderati&n the de*el&%(ent agenda and uni$ue circu(stances &f indi*idual c&untr!.

The l&gical $uesti&n here is what is the a%%r&%riate res%&nse f&r #usinesses in #&th the de*el&%ed c&untries and de*el&%ing c&untries li.e +ala!sia and Nigeria t& address these i((inent challengesG This is the tas. we ta.e u% in the secti&n that f&ll&ws.

III. STRATEGIC HRM AS A RES.ONSE TO THE CHALLENGES OF GLOBALIZATION. ,trategic 0u(an Res&urce +anage(ent /,0R+5 in*&l*e a set &f internall! c&nsistent %&licies and %ractices designed and i(%le(ented t& ensure that a fir()s

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hu(an ca%ital /e(%l&!ees5 c&ntri#ute t& the achie*e(ent &f its #usiness &#6ecti*es /Baird 3 +esh&ula(, 19::2 ;eler! 3 ;&t!, 199=2 0uselid, et al., 199"2 ac.s&n 3 ,chuler, 19945. ,chuler /19917 1:5 has de*el&%ed a (&re c&(%rehensi*e acade(ic definiti&n &f ,0R+7
,trategic hu(an res&urces (anage(ent is largel! a#&ut integrati&n and ada%tati&n. Its c&ncern is t& ensure that7 /15 hu(an res&urces /0R5 (anage(ent is full! integrated with the strateg! and the strategic needs &f the fir(2 /15 0R %&licies c&here #&th acr&ss %&lic! areas and acr&ss hierarchies2 and /95 0R %ractices are ad6usted, acce%ted, and used #! line (anagers and e(%l&!ees as %art &f their e*er!da! w&r..

>&r -right 3 +c+ahan /19915, ,0R+ refers t& Ethe %attern &f %lanned hu(an res&urce de%l&!(ents and acti*ities intended t& ena#le an &rgani'ati&n t& achie*e its g&alsF /%. 19:5. T& su( u%, it a%%ears that s&(e &f the fre$uentl! cited funda(ental ele(ents &f ,0R+ in the literature are7 ,0R+ %ractices are (acr&@&riented, %r&acti*e and l&ng ter( f&cused in nature2 *iews hu(an res&urces as assets &r in*est(ents n&t e8%enses2 i(%le(entati&n &f ,0R+ %ractices #ears lin.age t& &rgani'ati&nal %erf&r(ance2 and f&cusing &n the align(ent &f hu(an res&urces with fir( strateg! as a (eans &f gaining c&(%etiti*e ad*antage /Nee 3 Khatri, 199979115.

Th%* %'i&a# F*unda'i*n, *+ S' a'%3i& HRM ,e*eral the&retical %ers%ecti*es ha*e #een de*el&%ed t& &rgani'e .n&wledge &f h&w 0R %ractices are i(%acted #! strategic c&nsiderati&ns as #riefl! descri#ed #el&w. -right 3 +c+ahan /19915 ha*e de*el&%ed a c&(%rehensi*e the&retical fra(ew&r. c&nsisting &f si8 the&retical influences. >&ur &f these influences %r&*ide e8%lanati&ns f&r %ractices resulting fr&( strateg! c&nsiderati&ns. These include, a(&ng &thers, the res&urce@#ased *iew &f the fir( and #eha*i&ral *iew. The tw& &ther the&ries %r&*ide
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e8%lanati&ns f&r 0R %ractices that are n&t dri*en #! strateg! c&nsiderati&ns7 /15 Res&urce ;e%endence and /15 Instituti&nal The&r!.

The resource*based theory of the fir! #lends c&nce%ts fr&( &rgani'ati&nal ec&n&(ics and strategic (anage(ent /Barne!, 19915. This the&r! h&lds that a fir(?s res&urces are .e! deter(inants &f its c&(%etiti*e ad*antage. >ir(s can de*el&% this c&(%etiti*e ad*antage &nl! #! creating *alue in a wa! that is difficult f&r c&(%etit&rs t& i(itate. Traditi&nal s&urces &f c&(%etiti*e ad*antage such as financial and natural res&urces, techn&l&g! and ec&n&(ies &f scale can #e used t& create *alue. 0&we*er, the res&urce@#ased argu(ent is that these s&urces are increasingl! accessi#le and eas! t& i(itate. Thus the! are less significant f&r c&(%etiti*e ad*antage es%eciall! in c&(%aris&n t& a c&(%le8 s&cial structure such as an e(%l&!(ent s!ste(. If that is s&, hu(an res&urce %&licies and %ractices (a! #e an es%eciall! i(%&rtant s&urce &f sustained c&(%etiti*e ad*antage / ac.s&n 3 ,chuler, 19942 Afeffer, 199C5. ,%ecificall!, f&ur e(%irical indicat&rs &f the %&tential &f fir( res&urces t& generate c&(%etiti*e ad*antage are7 *alue, rareness, i(ita#ilit! and su#stituta#ilit! /Barne! /19915. In &ther w&rds, t& gain c&(%etiti*e ad*antage, the res&urces a*aila#le t& c&(%eting fir(s (ust #e *aria#le a(&ng c&(%etit&rs and these res&urces (ust #e rare /n&t easil! &#tained5. Three t!%es &f res&urces ass&ciated with &rgani'ati&ns are /a5 %h!sical /%lant2 techn&l&g! and e$ui%(ent2 ge&gra%hic l&cati&n5, /#5 hu(an /e(%l&!ees) e8%erience and .n&wledge5, and /c5 &rgani'ati&nal /structure, s!ste(s f&r %lanning, (&nit&ring, and c&ntr&lling acti*ities2 s&cial relati&ns within the &rgani'ati&n and #etween the &rgani'ati&n and e8ternal c&nstituencies5. 0R %ractices greatl! influence an &rgani'ati&n)s hu(an and &rgani'ati&nal res&urces and s& can #e used t& gain c&(%etiti*e ad*antages /,chuler 3 +ac+illan, 19:C5

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The sec&nd the&retical influence is the beha#ioral #iew #ased &n c&ntingenc! the&r!. This *iew e8%lains %ractices designed t& c&ntr&l and influence attitudes and #eha*i&rs, and stresses the instru(entalit! &f such %ractices in achie*ing strategic &#6ecti*es. The cybernetic syste! e8%lains the ad&%ti&n &r a#and&n(ent &f 0R %ractices resulting fr&( feed#ac. &n c&ntri#uti&ns t& strateg!. >&r e8a(%le, training %r&gra(s (a! #e ad&%ted t& hel% %ursue a strateg! and w&uld #e su#se$uentl! ad&%ted &r a#and&ned #ased &n feed#ac.. The f&urth influence, #ased &n transaction costs e8%lains wh! &rgani'ati&ns use c&ntr&l s!ste(s such as %erf&r(ance e*aluati&n and reward s!ste(s. The argu(ent is that in the a#sence &f %erf&r(ance e*aluati&n s!ste(s lin.ed t& reward s!ste(s, strategies (ight n&t #e %ursued. The &ther tw& the&ries %r&*ide e8%lanati&ns f&r 0R %ractices that are n&t dri*en #! strateg! c&nsiderati&ns #ut #ased &n %&wer and %&litical influences, c&ntr&l &f res&urces /resource*based theory5 and e8%ectati&ns &f s&cial res%&nsi#ilit! / institutional theory5 /Greer, 19947 1D"@:5.

Im)#i&a'i*n, +* HRM . a&'i&%, The idea that indi*idual 0R %ractices i(%acts &n %erf&r(ance in an additi*e fashi&n /;eler! 3 ;&t!, 199=5 is inc&nsistent with the e(%hasis &n internal fit in the res&urce@#ased *iew &f the fir(. -ith its i(%licit s!ste(s %ers%ecti*e, the res&urce@ #ased *iew suggests the i(%&rtance &f Ec&(%le(entar! res&urcesF, the n&ti&n that indi*idual %&licies &r %ractices Eha*e li(ited a#ilit! t& generate c&(%etiti*e ad*antageF /Barne!, 199474=5. This idea, that a s!ste( &f 0R %ractices (a! #e (&re than the su( &f the %arts, a%%ears t& #e c&nsistent with discussi&ns &f s!nerg!, c&nfigurati&ns, c&ntingenc! fact&rs, e8ternal and internal fit, h&listic a%%r&ach, etc /;eler! 3 ;&t!, 199=2 0uselid, 19945. ;rawing &n the the&retical w&r.s &f Oster(an

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/19:"5, ,&nnenfeld 3 Aei%erl /19::5, Kerr and ,l&cu( /19:"5 and +iles 3 ,n&w /19:C5, ;eler! 3 ;&t! /199=5 identified se*en %ractices that are c&nsistentl! c&nsidered strategic 0R %ractices. These are /15 internal career &%%&rtunit! /15 f&r(al training s!ste(s /95 a%%raisal (easures /C5 %r&fit sharing /45 e(%l&!(ent securit! /=5 *&ice (echanis(s and /"5 6&# definiti&n. There are &ther ,0R+ %ractices that (ight affect &rgani'ati&nal %erf&r(ance. >&r e8a(%le, ,chuler 3 ac.s&n /19:"5 %resented a *er! c&(%rehensi*e list &f 0R %ractices. 0&we*er, the se*en %ractices listed #! ;eler! and ;&t! a#&*e a%%ear t& ha*e the greatest su%%&rt acr&ss a di*erse literature. >&r e8a(%le, nearl! all &f these are als& a(&ng Afeffer)s /199C5 1= (&st effecti*e %ractices f&r (anaging %e&%le.

An &#*i&us $uesti&n at this 6uncture is7 0&w can &rgani'ati&ns effecti*el! ad&%t, i(%le(ent and (a8i(i'e 0R+ %ractices f&r *alued fir( le*el &utc&(esG That is, h&w can fir(s increase the %r&#a#ilit! that the! will ad&%t and then effecti*el! i(%le(ent a%%r&%riate 0R+ %racticesG Insuring that (e(#ers &f the 0R+ %ers&nnel ha*e the a%%r&%riate hu(an ca%ital &r c&(%etencies has #een suggested as &ne wa! t& increase the li.elih&&d &f effecti*e i(%le(entati&n &f 0R+ %ractices /0uselid, et al., 199"5.

<lrich 3 Heung /19:95 argue that the future 0R %r&fessi&nal will need f&ur #asic c&(%etencies t& #ec&(e %artners in the strategic (anage(ent %r&cess. These include #usiness c&(%etence, %r&fessi&nal and technical .n&wledge, integrati&n c&(%etence and a#ilit! t& (anage change.

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On the &ther hand, the <nited Kingd&(@#ased +anage(ent Charter Initiati*e /+CI5, an inde%endent c&(%etence@#ased (anage(ent de*el&%(ent &rgani'ati&n, identifies se*en .e! r&les and re$uired c&(%etencies. These include c&(%etencies re$uired t& (anage r&les li.e (anaging acti*ities, (anaging res&urces, (anaging %e&%le, (anaging inf&r(ati&n, (anaging energ!, (anaging $ualit! and (anaging %r&6ects /+CI +ange(ent ,tandards, A%ril, 199"5. >inall!, 0uselid, et al /199"5 identified tw& sets &f 0R %ers&nnel c&(%etencies as i(%&rtant f&r 0R %ers&nnel7 /15 0R %r&fessi&nal c&(%etencies and /15 Business@related c&(%etencies.

/R professional co!petence descri#es the state@&f@the@art 0R .n&wledge, e8%ertise and s.ill rele*ant f&r %erf&r(ing e8cellentl! within a traditi&nal 0R functi&nal de%art(ent such as recruit(ent and selecti&n, training, c&(%ensati&n, etc. This c&(%etence insures that technical 0R .n&wledge is #&th %resent and used within a fir( /0uselid, et al., 199"5. Business*related co!petence refers t& the a(&unt &f #usiness e8%erience 0R %ers&nnel ha*e had &utside the functi&nal 0R s%ecialt!. These ca%a#ilities sh&uld facilitate the selecti&n and i(%le(entati&n &f 0R+ %&licies and %ractices that fit the uni$ue characteristics &f a fir( including its si'e, strateg!, structure, and culture / ac.s&n 3 ,chuler, 19945. In &ther w&rds, these c&(%etencies will ena#le the 0R staff t& .n&w the c&(%an!)s #usiness and understand its ec&n&(ic and financial ca%a#ilities necessar! f&r (a.ing l&gical decisi&ns that su%%&rt the c&(%an!)s strategic %lan #ased &n the (&st accurate inf&r(ati&n %&ssi#le.

S' a'%3i& HRM and O 3ani;a'i*na# .% +* man&% Researchers in ,0R+ %&sit that greater use &f such %ractices will alwa!s result in #etter /&r w&rse5 &rgani'ati&nal %erf&r(ance /A#&wd, 199D2 Gerhart and +il.&*ich,

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199D2 0uselid, 19942 Ie&nard, 199D2 Ter%stra and R&'ell, 19995. Ie&nard /199D5 f&und that &rgani'ati&ns ha*ing l&ng@ter( incenti*e %lans f&r their e8ecuti*es had larger increases in return &n e$uit! &*er a f&ur@!ear %eri&d than did &ther &rgani'ati&ns. A#&wd /199D5 f&und that the degree t& which (anagerial c&(%ensati&n was #ased &n an &rgani'ati&n)s financial %erf&r(ance was significantl! related t& future financial %erf&r(ance. Gerhart and +il.&*ich /199D5 f&und that %a! (i8 was related t& financial %erf&r(ance. Organi'ati&ns with %a! %lans that included a greater a(&unt &f %erf&r(ance c&ntingent %a! achie*ed su%eri&r financial %erf&r(ance. In c&(#inati&n, these studies indicate that &rgani'ati&ns with str&nger %a!@f&r@%erf&r(ance n&r(s achie*ed #etter l&ng@ter( financial %erf&r(ance than did &rgani'ati&ns with wea.er %a!@f&r@%erf&r(ance n&r(s.

Ter%stra and R&'ell /19995 %&sited fi*e J#estJ staffing %ractices and f&und that the use &f these %ractices had a (&derate and %&siti*e relati&nshi% with &rgani'ati&nal %erf&r(ance. >inall!, 0uselid /19945 identified a lin. #etween &rgani'ati&n@le*el &utc&(es and gr&u%s &f high %erf&r(ance w&r. %ractices. Instead &f f&cusing &n a single %ractice /e.g., staffing5, 0uselid assessed the si(ultane&us use &f (ulti%le s&%histicated 0R %ractices and c&ncluded that the 0R s&%histicati&n &f an &rgani'ati&n was significantl! related t& turn&*er, &rgani'ati&nal %r&ducti*it! and financial %erf&r(ance.

In the case &f re$uisite c&(%etencies f&r 0R %ers&nnel, e(erging e*idence fr&( e(%irical research de(&nstrates the increasing need f&r 0R %ers&nnel t& ha*e #&th 0R %r&fessi&nal and #usiness@related s.ills and c&(%etencies. A sur*e! &f 0R e8ecuti*es in the <, sh&w that 0R (anagers are s%ending relati*el! less ti(e in

1D

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rec&rd .ee%ing and auditing, while their ti(e s%ent in their acti*ities as a #usiness %artner ha*e d&u#led. The sur*e! als& re*ealed that 0R (anagers #elie*e that their 0R staff)s (&st i(%&rtant s.ill needs are tea( s.ills, c&nsultati&n s.ills and an understanding &f #usiness /N&e, et al., 199"5.

+anagerial c&(%etencies %articularl! in the 0R functi&n #ring tw& ad*antages t& the 0R functi&n7 /15 Enhance the status &f the 0R de%art(ent /Barne! 3 -right, 19::5 /15 Act as i(%&rtant influences &n the le*el &f integrati&n #etween 0R (anage(ent and &rgani'ati&n strateg! /G&lden 3 Ra(anu6a(, 19:42 R&%&, 19995. A stud! &f ,inga%&rean c&(%anies f&und that when 0R (anagers lac. the necessar! s.ills t& %erf&r( their duties c&(%etentl!, line (anagers and e8ecuti*es ta.e &*er s&(e &f the functi&ns &f 0R (anagers /Nee 3 Khatri, 19995. Research &n (anagerial c&(%etencies #! R&%& /19997415 stressed that Ethe internal d!na(is( &f the 0R functi&n ser*es as the (&st critical (echanis( t& .ee% the integrati&n %r&cess g&ing after it has #een started under fa*&ra#le &rgani'ati&nal and strategic circu(stancesF. Other studies sh&w that if 0R (anagers can e*aluate their %ri&rities and ac$uire new sets &f %r&fessi&nal and %ers&nal c&(%etencies, the 0R functi&n w&uld #e a#le t& ride the wa*e &f #usiness e*&luti&n %r&udl! with &ther functi&ns in the &rgani'ati&n /Bec.er 3 Gerhart, 199=2 <lrich, et al., 19945.

0uselid, et al /199"5 c&nducted an ela#&rate stud! &n 199 fir(s in the <, t& e*aluate the i(%act &f hu(an res&urce (anagers) %r&fessi&nalKtechnical c&(%etencies &n 0R %ractices and the latter)s i(%act &n &rgani'ati&nal %erf&r(ance. Results &f the stud! suggest that c&nsistent with the res&urce@#ased *iew &f the fir(, there e8ist a significant relati&nshi% #etween ,0R+ %ractices and fir( %erf&r(ance. The! f&und

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that /15 0R related c&(%etencies and, t& a lesser e8tent, #usiness@related c&(%etencies increase the e8tent &f effecti*e i(%le(entati&n &f ,0R+ %ractices and /15 c&nsistent with recent studies lin.ing 0R+ acti*ities and fir( %erf&r(ance /Arthur, 199C2 Cutcher@Gershenfeld, 19912 0uselid, 19942 0uselid 3 Bec.er, 199=2 +ac;uffie, 19945, the stud! su%%&rt the argu(ent that in*est(ents in hu(an res&urces are a %&tential s&urce &f c&(%etiti*e ad*antage.

Recent re*iews &f the&retical and e(%irical literature / uhar! Ali 3 Bawa, 19992 Irwin, et al., 199:2 ac.s&n 3 ,chuler, 19945 suggest that a *ariet! &f fact&rs affect the relati&nshi% #etween 0R+ and fir( %erf&r(ance. These fact&rs include fir( si'e, techn&l&g! and uni&n c&*erage.

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The influence &f fir! si e &n 0R+ %ractices is full! d&cu(ented in the&retical and e(%irical studies. >&r e8a(%le, instituti&nal the&r! suggests that larger &rgani'ati&ns sh&uld ad&%t (&re s&%histicated and s&ciall! res%&nsi*e 0R+ %ractices #ecause the! are (&re *isi#le and are under (&re %ressure t& gain legiti(ac!. +an! e(%irical studies sh&w that fir( si'e is an i(%&rtant *aria#le influencing 0R+ %ractices /Ng and +a.i, 19992 -agar, 199:5. There are e(erging e*idences that 0R %ractices (a! differ in &rgani'ati&ns de%ending &n the le#el of technological sophistication in ter(s &f training /+a6chr'a., 19::5, %erf&r(ance a%%raisal /Ouchi, 19"", 19:D2 ,nell, 19915 and reward s!ste(s /Kaus, 199D2 ,nell 3 ;ean, 19915. The&retical and e(%irical studies als& su%%&rt the %&siti&n that the %resence &f s%ecific 0R+ %ractices (a! differ #ased &n the union co#erage &f a fir( /Ng 3 +a.i, 1999, -agar, 199:2 Iawler 3 +&hr(an 19:"5.

I<. FRAME=OR7 AND .RO.OSITIONS >r&( the discussi&ns s& far, the f&ll&wing issues e(erge. /15 That there a%%ears t& #e a significant relati&nshi% #etween strategic 0R+ %ractices and fir( %erf&r(ance /l&w e(%l&!ee turn&*er, high %r&ducti*it! and high %r&fita#ilit! /0uselid, et al., 199"5. /15 It is als& clear that there e8ist l&w incidence &f i(%le(enting ,0R+ %ractices relati*e t& technical 0R+ %ractices /0uselid, et al., 199"2 -right 3 +c+ahan, 19915. /95 >urther (&re alth&ugh there e8ists a significant relati&nshi% #etween the e8tent &f #&th 0R %r&fessi&nal and #usiness@related (anagerial c&(%etencies and the incidence &f i(%le(enting 0R+ %ractices, &rgani'ati&ns ha*e achie*ed higher le*els &f 0R %r&fessi&nal c&(%etencies relati*e t& #usiness@related c&(%etencies. /C5 >inall!, en*ir&n(ental c&nte8t *aria#les li.e fir( si'e, techn&l&g! and uni&n status affect the

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e8tent &f i(%le(enting 0R+ %ractices / ac.s&n 3 ,chuler, 19942 ,nell 3 ;ean, 19912 -agar, 199:5. The relati&nshi%s discussed a#&*e are %resented in the figure #el&w and rele*ant %r&%&siti&ns deri*ed. This the&retical fra(ew&r. is in .ee%ing with the thin.ing &f a nu(#er &f auth&rs including ;eler! 3 ;&t! /199=5, 0uselid, et al. /199"5, ac.s&n 3 ,chuler /19945 and -right 3 +c+ahan /19915.

Th%* %'i&a# F am%w* 2 +* Human R%,*u &% Mana3%m%n'

Intervening Variables

T%&hni&a# Human R%,*u &% . a&'i&%,

Independent Variables Dependent Variable

MANAGERIAL
COM.ETENCIES 0R Ar&fessi&nal C&(%etence Business @related C&(%etence ORGANIZATIONAL .ERFORMANCE

S' a'%3i& Human R%,*u &% . a&'i&%,

ORGANIZATIONAL CONTE>T <ARIABLES >ir( si'e Ie*el &f Techn&l&g! <ni&n C&*erage Moderating Variables The f&ll&wing testa#le %r&%&siti&ns are deri*ed fr&( the fra(ew&r. a#&*e.

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1. 0u(an res&urce (anagers (a! ha*e achie*ed higher le*els &f 0R %r&fessi&nal c&(%etencies and l&wer le*els &f #usiness related c&(%etencies 1. The incidence &f i(%le(enting strategic 0R %ractices is l&wer in &rgani'ati&ns es%eciall! in the de*el&%ing c&untries. 9. B&th 0R %r&fessi&nal c&(%etence and .n&wledge &f the #usiness /#usiness related c&(%etence5 significantl! c&ntri#ute t& the e8tent &f i(%le(enting ,0R+ Aractices C. +anagerial c&(%etencies are significantl! related t& &rgani'ati&nal %erf&r(ance 4. The e8tent &f i(%le(enting ,0R+ %ractices c&ntri#ute significantl! t& fir( le*el &utc&(es =. The relati&nshi% #etween ,0R+ and &rgani'ati&nal %erf&r(ance is affected #! &rgani'ati&nal c&nte8t *aria#les /fir( si'e, le*el &f techn&l&g! and uni&n c&*erage5.

It (a! #e %ertinent t& %&int &ut here that the si8 %r&%&siti&ns deri*ed fr&( the fra(ew&r. are %articularl! rele*ant f&r gi*ing insights int& the 0R+ challenges facing &rgani'ati&ns in the new era gl&#ali'ati&n. In &ther w&rds, these %r&%&siti&ns will hel% us &rgani'e th&ught &n the le*el &f readiness /and &therwise5 &f &rgani'ati&ns in res%&nse t& the challenges &f the gl&#al #usiness en*ir&n(ent. >&r e8a(%le, if 0R %ers&nnel es%eciall! in de*el&%ing c&untries de(&nstrates higher le*els &f 0R %r&fessi&nal c&(%etence relati*e t& the #usiness@related c&(%etence /as f&und in the literature5, it w&uld #e i(%&rtant t& set right this wr&ng as a ste%%ing st&ne f&r succeeding in gl&#al #usiness. This is #ecause t& succeed in the new era &f gl&#ali'ati&n, the hu(an fact&r is central. That is wh! it is necessar! f&r 0R %ers&nnel t& %r&*e the(sel*es #e!&nd reas&na#le d&u#t that the! are ca%a#le &f

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%la!ing .e! r&les in enhancing the status &f the 0R de%art(ent /Barne! 3 -right, 19::5, (ust %&ssess a th&r&ugh understanding &f #usiness /N&e, et al., 199"5 and als& act as i(%&rtant influences in the le*el &f integrati&n #etween 0R (anage(ent and &rgani'ati&nal strateg! /G&lden 3 Ra(anu6a(, 19:42 R&%&, 19995. <. CONCLUSIONS This %a%er set &ut as a c&ntri#uti&n t& the current disc&urse &n the interacti&n &f gl&#ali'ati&n and #usiness %erf&r(ance es%eciall! with a fla*&r &f the challenges fr&( the %ers%ecti*es &f de*el&%ing c&untries such as +ala!sia and Nigeria. This %a%er %resents a fra(ew&r. f&r ,trategic 0u(an Res&urce +anage(ent as a res%&nse t& %re%are &rgani'ati&ns f&r the challenges &f gl&#ali'ati&n. It has #een &#ser*ed that #! and large &rgani'ati&ns ha*e achie*ed relati*el! l&w le*els &f effecti*eness in i(%le(enting ,trategic 0u(an Res&urce +anage(ent /,0R+5 %ractices /0uselid, et al., 199"5. If the %r&%&siti&ns &utlined a#&*e are su%%&rted, then the real challenge f&r &rgani'ati&ns in the era &f gl&#ali'ati&n is t& %a! %articular e(%hasis t& strengthening their hu(an res&urces #! u%grading the rele*ant c&(%etencies.

As g&*ern(ents and c&r%&rate #&dies #race u% f&r the new (illenniu( characteri'ed #! an e*er@increasing gl&#al challenge, de*el&%ing c&untries ha*e n& ch&ice #ut t& de*el&% and c&ntinu&usl! u%grade the hu(an res&urce and #usiness c&(%etencies &f their w&r.f&rce. In the case &f de*el&%ing c&untries, distinct c&(%etencies are i(%&rtant t& deal with n&t &nl! the 0R issues #ut als& &thers including %artnershi%s in ec&n&(ic rec&*er! es%eciall! in ,&uth East Asia, dealing with the E#ig #&!sF, the fund (anagers, c&ncerns &*er %&ssi#ilit! &f fraud in E@c&((erce with fast s%read &f Inf&r(ati&n Techn&l&g! and last #ut n&t least, i(%le(enting %rescri%ti&ns f&r rec&*er! and gr&wth ta.ing in t& c&nsiderati&n the de*el&%(ent agenda and uni$ue

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circu(stances &f indi*idual c&untries. Addressing these issues is a necessar! ste% t&wards facing the challenges &f gl&#ali'ati&n in t& the ne8t (illenniu(.

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