INTERNATIONAL HUMAN RESOURCE MANAGEMENT

Dr. Shyamal Gomes

Chapter – 1: Conceptual Framework: The Globalization

Introduction: The exponential growth in the exchange of goods, ideas, institutions and people that we see
today is part of a long-term historical trend. Over the course of human history, the desire for something better
and greater has motivated people to move themselves, their goods, and their ideas around the world.

Globalization is an alternative development process by which a group of individual or individual can direct
interact across frontier by learning, sharing, exchange and application for faster growth, higher living of
standard and tried for equal opportunities, instead of leaving billions of them behind in squalor.

This process has effects on the environment, on culture, on political systems, on economic development and
prosperity, and on human physical well-being in societies around the world. (The Levin Institute, USA)

Historical Overview of Globalization:

Since the first appearance of the term in 1962 'globalization' has gone from jargon to cliché. The Economist has
called it "the most abused word of the 21st century." Certainly no word in recent memory has meant so many
different things to different people and has evoked as much emotion. Some see it as nirvana - a blessed state
of universal peace and prosperity - while others condemn it as a new kind of chaos.

If properly defined and applied, the "g-word" actually does have some utility. It can best be understood as a
leitmotif of human history. It is a trend that has intensified and accelerated in recent decades and come into
full view with all its benefits and destructive power. Just as climate has shaped the environment over the
millennia, the interaction among cultures and societies over tens of thousands of years has resulted in the
increasing integration of what is becoming the global human community.

Globalization - defined by Webster's dictionary as a process that renders various activities and aspirations
"worldwide in scope or application" - has been underway for a long time. Thousands of years before the root
word for this concept - 'globe' - came into use, our ancestors had already spread across the earth. In fact, the
process by which they migrated and populated all the continents except Antarctica was a kind of proto-
globalization. Some 50,000 years ago early forms of homo sapiens, who developed in east Africa, began to
travel to the far corners of the world, including to the continents of North and South America. Rising sea levels
at the end of the ice age separated the Americas from the Eurasian land mass, creating two worlds that were
now cut off from each other. They would not be reconnected until Christopher Columbus's serendipitous
landing on a Caribbean island in 1492. That same year a German geographer, Martin Behaim, built the first
known globe as a representation of the earth.

The reconnection was called the 'Columbian exchange,' and it is celebrated as a landmark in the history of
globalization. The discovery of the New World brought together peoples who had been separated for over
10,000 years. No less significant has been the exchange of plants and animals. A Peruvian tuber, the potato,
has become a staple throughout the world, Mexican chili pepper has taken over Asia, and an Ethiopian crop,
coffee, found new homes from Brazil to Vietnam, to name just a few. In the intervening period, societies have
not only evolved in radically different ways and developed different economic and political structures, but they
have also invented different technologies, grown different crops and, most importantly, developed different
languages and ways of thinking. That diversity makes the job of reconnecting civilizations both challenging and
rewarding.

Historically there were four main motives that drove people to leave the sanctuary of their family and village:
conquest (the desire to ensure security and extend political power), prosperity (the search for a better life),
proselytizing (spreading the word of their God and converting others to their faith), and a more mundane but
still powerful force -curiosity and wanderlust that seem basic to human nature. Therefore, the principal agents
of globalization were soldiers (and sailors), traders, preachers and adventurers. Signs of trade in the dawn of
civilization can be seen in old seashells carried deep into the interior of Africa. Thousands of years ago traders
carried goods from one part of the globe to another across oceans. Missionaries traversed deserts and
mountains and sailed the seas. The spread of Buddhism from India to Indonesia led to the creation of the
Borobudur temple, which is one of the first monuments of globalization. From the Chinese Buddhist monk
Faxian's journey to India in the 4th century, to the Arab explorer Ibn Batuta's travels to Europe, Asia and Africa
a thousand years later, adventurers have continued to find new frontiers and establish connections among far-
flung societies, cultures and economies. Even though travel was slow and dangerous, ambitious and acquisitive
leaders - from Alexander the Great to Genghis Khan - ventured far from home and brought new lands under
their sway. Conquest meant globalization in both directions, since the rulers often ended up being as
influenced by those they ruled as vice versa.

The cast of characters whose drive and determination have established links of both domination and
cooperation has changed with times. Small bands of traders carrying their wares on their backs or in boats
have been replaced by giant enterprises, starting with the Dutch and British East India Companies in the 17th
century. In place of solitary pilgrims and priests have come vast religious organizations that spread their
beliefs, along with their languages, literatures and architecture. The few intrepid adventurers and travellers of
past centuries who brought distant societies together have given way to thousands and even millions of
refugees and immigrants fleeing across borders, as well as hundreds of millions of tourists jetting around the
world. All these comings and goings deepen and broaden the connections among far parts of the world and
facilitate the transmission of goods, ideas and cultures.

The commercial history of the past five hundred years is marked by other trends and transactions that have
strengthened the bonds of interconnectedness. The rubber plants uprooted from the jungles of Brazil and
transplanted in Malaysia by British colonialists in the first years of the 20th century provided the raw material
for the tires in Henry Ford's Model T; the indentured rubber tapper from China and India altered Malaysia's
ethnic composition forever. The introduction of new crops like corn and sweet potatoes from the New World
had a dramatic impact on demography. For example, the growth of population in China, which had been held
in check by the shortage of irrigable rice fields, got a boost from new crops that could be grown on marginal
soil. Similarly, Chechnya's population grew apace after the arrival of corn from the New World.

From the Roman Empire, to Pax Britannica two centuries ago, to the Pan Americana of today, the power of
super states has been another force changing the nature of interdependence. In the emerging global supply
chain that now feeds consumer production worldwide, Western and American multinational corporations have
taken a lead role.

The expanding circle of free trade has boosted economic growth and spawned a burgeoning middle class,
which, in turn, has increased consumption of globally produced goods and rise in international tourism. Most
striking have been the world's two most populous countries, China and India. With rising income and greater
consumption has come more personal freedom and a growing demand for accountable government. Even
though the vast majority of the world population is still poor, the ideas of democracy, human rights and press
freedom have spread. The percentage of countries which hold multi-party elections to choose their
governments has grown from less than thirty percent in 1974 to over sixty percent of the 192 countries in the
world.

The most powerful force for transmitting the ideas of democracy and human rights across borders is the
revolution in information technology in the second half of the 20th century. The telephone, television and the
Internet have been the key tools. In the late 19th century, it took Queen Victoria sixteen and a half hours to
send a message of greeting across a transatlantic cable to President James Buchanan. Today vast amounts of
information in multiple formats - text, voice, video - are transmitted at the speed of light. Moreover, a three
minute call from New York to London costs less than a dime, instead of the $300 it cost in 1930. This dramatic
drop in the price of telecommunications has made the benefits of the information explosion available to much
of humanity.

Meanwhile, innovations like satellite television have connected people's emotions across borders and oceans:
the news of Princess Diana's death flashing on cable TV's immediately elicited wreathes of flowers from
around the world. The free flow of information is also helping bridge the political divide: September 11
triggered a candlelight vigil among young Iranians. But it has also been hardening attitudes along ideological
boundaries. The Arabic-language satellite station Al Jazeera's live broadcast of Israeli-Palestine violence has
widened the gulf between Arabs and Israelis.

The falling cost of communications and transportation has boosted economic growth while literacy and better
health care have improved quality of life. People the world over are living longer and healthier lives, while the
number of people living in poverty has dropped in most regions (though it has increased in Africa and South
Asia).

Yet faster growth has its cost, too. The reduction in poverty worldwide has negative environmental
consequences. Close to one percent of the world's rainforest is disappearing every year because of expanding
agriculture and trade in forest products. The closely knit global communication network that makes growth
possible has also made the world as a whole more vulnerable to everything from disease and mischief to
terror. HIV infection in humans developed in Africa and South America but has spread to the entire world, now
infecting some 14,000 people each day. In 1997, in barely five hours the "I love you" computer virus released
by pranksters in Manila wreaked $700 million worth of damage worldwide. The September 11 hijackers made
use of electronic transfers of funds to finance their operation. They also relied on the Internet to coordinate
their moves and buy airline tickets. Since the attacks, Osama Bin Laden's favourite means of communicating
with the world from his cave has been satellite TV.

Not that any of this mixture of the good and the bad is new. Throughout history, the introduction of
breakthrough technologies has brought disruption, and created winners and losers. When the Old World
connected with the New World through colonizers and explorers, new pathogens like small pox and influenza
caused a "demographic holocaust," killing three out of every four Native Americans. The colonization of the
Americas and vast parts of Asia, Africa, the Middle East and Latin America, has destroyed traditional social
structures and political power while speeding up the process of economic integration. The need for labor to
mine silver and work the plantations resulted in the transfer of some 10 million slaves from Africa. On the
other hand, the economies of Europe and Asia boomed, fuelled by the flow of precious metals and new
commodities.

No other country has played as significant a role in reconnecting the world as the United States, itself an early
product of modern globalization. A vast majority of some 60 million people who left their place of birth in the
most intense period of globalization in the late 19th century went to the US. Immigrants and slaves built the
richest nation in history. They drew upon world resources - starting with the water mill and steam engine
technology from Britain - and emerged as a leading innovator and the most potent engine of globalization.
With the American victory in the World War II Pacific arena and the launch of the Marshall plan, US economic
and military power has spread to far corners of the world, culminating in the end of the Cold War. The fall of
the Berlin Wall symbolized the end of a global ideological division and gave a boost to the latest burst of
globalization itself. It is no wonder many around the world see - and resent - globalization as a euphemism for
Americanization.

At the same time, the end of the Cold War has brought into sharper focus the other huge chasm that exists
between the rich and the developing nations. While globalization has created unprecedented riches, many
people have also been left mired in poverty. Industrialized countries with developed infrastructure, institutions
and education, and middle income countries which opened up the economy have benefited most from
globalization, but the poorest countries have not grown, or in some cases have even sunk back. Thus despite
the overall fall in the rate of poverty, close to a third of the world population still lives in utter poverty without
access to electricity or drinking water. The gap between the rich and the poor countries and between the
wealthy and the indigent within countries has also widened. The rules of global engagement that have
evolved, and the institutions that manage them - from the International Monetary Fund to the World Trade
Organization - reflect the power imbalance between wealthy and poor nations.

Thanks to the wider diffusion of information, today's have-nots are more aware of the gap between
themselves and the rich West, and between themselves and Western-backed domestic elites. This
consciousness can be a powerful source of resentment and protest, such as the anti-American demonstrations
from Venezuela to the Philippines. Overt or subliminal political and cultural messages carried with goods, ideas
and entertainment from the developed world has added to the sense of disruption in many traditional
societies. Combined with the misery and misrule in many countries, the bright lights of the West lure many to
seek their fortunes elsewhere. The rising tide of illegal immigrants washing over the developed countries has
become a major concern. The reconnection of the world through goods and ideas has also evoked conflicting
responses - from admiration to bitter nationalistic and religious resistance. While students in Iran clamour for
an American-style life, many in the West oppose globalization as the symbol of iniquitous free market
capitalism. Many people around the globe also see a Western-led globalization aimed at destroying Islam.

What does all this mean for globalization? Will globalization be forced to retreat in the face of growing
disillusionment and dangers such as terrorists' who abuse open borders and easy economic transactions?
There is, of course, a precedent for such a decline in globalization. Between the two World Wars, free trade
and the free movement of people did slow to a crawl, thanks to the raising of tariff walls and a closed door to
immigration. But those restrictions did not dampen the same four basic motivations - conquest, search for
prosperity, proselytizing and curiosity - that have driven globalization. The Allied victory against the Nazis and
Japan, in fact, reopened the flood gates of globalization, giving a further boost to trade and travel.

To be sure, many issues could throw a wrench into the engines of international integration - issues like the
growing anti-immigrant sentiment in Europe, the West's farm subsidies and intellectual property rights
concerns and the tightened visa policies of the US since Sept. 11. However, the secular trend of people
connecting with the world would be hard to reverse. The search for prosperity still drives businesses to expand
beyond their borders and consumers to buy the best at an affordable price, irrespective of the country of
origin. The same curiosity about others that led the likes of Ibn Batuta to leave home leads millions to travel,
to watch foreign movies, eat different foods and enjoy international music and sports events. The biggest
difference between the globalization of the past and that of today lies in its visibility and speed. The
accelerated speed of global interaction has telescoped its impact and the global spread of the media has made
it instantly visible - something that in the past happened in slow motion and often out of sight. With all its
promises and pitfalls, the historical process of reconnecting the human community is here to stay and
increasingly visible and increasingly a challenge. Our task - whether we are citizens, scholars or statesmen - is
to understand and manage globalization, doing our best to encourage its favourable aspects and keep its
negative consequences at bay.

Globalization and Its Impact on Labour:

Last January we witnessed the enlargement of the European Union to include two new members,
Romania and Bulgaria, in addition to the ten countries added in 2004. The European Union is
without doubt the greatest example of the spread of free trade in the world today, and to an
economist, that is what globalization is all about. But the spread of free trade does not come
without challenges, which take several forms.

First, there is the potential impact of trade on wages, which is an issue of ongoing concern in Europe.

Outsourcing, or off shoring, continues to receive a good deal of attention in the United States too.
This aspect of trade was discussed at a conference sponsored by the US Federal Reserve Bank, held
last summer in Jackson Hole. In addition, this past September the Federal Reserve Bank held a
meeting in Washington, D.C., to discuss the implications of outsourcing for the US economy, which I
attended. I will draw on these meetings to describe the impact of outsourcing on the economy in
general, and workers in particular.

Second, there is the question of how free trade affects the productivity of firms. As productivity
improves, we expect those gains to be reflected in lower prices, and therefore higher real wages, so
this second question also relates to the impact of globalization on workers. There is less research on
the impact of free trade on productivity than on wages themselves, but there are some very recent
studies that we can draw on in this regard.

Third, there is the issue of labour mobility between countries, such as from new EU members to the
rest of Europe. Migration is also an issue in North America, especially the migration from Mexico to
the United States. In 2005, there were close to 12 million Mexicans living in the United States, which
is more than 10% of the population of Mexico. It is no surprise, then, that immigration is a frequent
topic of debate. I will draw on the latest research to describe the effects of immigration on US
wages. I take the ongoing enlargement of the European Union, with both its benefits and its
challenges, as the motivation for my talk today; but by necessity, I will focus on the area of the world
I know more about – North America. It has now been over 10 years since Canada, Mexico and the
United States signed the North American Free Trade Agreement (NAFTA), in 1994, allowing for free
trade between the three countries. But Canada and the United States had signed an agreement five
years before that, in 1989, allowing for free trade between themselves. And of course, both of these
agreements carried on a process of integration of the North American market that had started some
years before. So as I look at what the impact of free trade in North America has been, I will start a
decade before the Canada-US agreement, giving us more than 25 years to see the effects of
economic integration on that continent.

Motives of Globalization:

1. Conquest: The desire to ensure security and extend political power

2. Prosperity: The search for a better life / wealth
3. Curiosity : Basic Human Nature
4. Prozetilizing : Spreading the word of their GOD and converting other to their faith.
Principle Agent of Globalization:

1. Soldiers
2. Preachers
3. Traders
4. Adventurers

Primary Objectives of Globalization:

• The transmission of Goods, ideas and culture

• Exchange of need based resources
• Diversification of Culture
• Building Global Human Community
• World Trade Integration
• World wide policy and technology development

Impacts of Globalization:

• Global supply chain that now feeds consumer production world wide. Western and
American multinational corporations have taken a lead role.

• Expanding circle of free trade – boosted economic growth spreads burgeoning middle class,
which , in tern , has increase and consumption of globally produced goods and rise in
international tourism.

• Transmitting the ideas of democracy and human rights across the borders is the revolution
in Information Technology, in the second half of the 20th century. The telephone, TV, and
internet have been the key tools.

• People’s Emotions, support and cooperation across borders and oceans - the news of
Princess Diana's death flashing on cable TV's immediately elicited wreathes of flowers from
around the world. The free flow of information is also helping bridge the political divide:
September 11 triggered a candlelight vigil among young Iranians.
• Industrial (alias trans nationalization) - emergence of worldwide production markets and
broader access to a range of foreign products for consumers and companies.
• Financial - emergence of worldwide financial markets and better access to external financing
for corporate, national and sub national borrowers.
 Ecological- the advent of global environmental challenges that can not be solved without
international cooperation, such as climate change, cross-boundary water and air pollution,
over-fishing of the ocean, and the spread of invasive species.
 Economic - realization of a global common market, based on the freedom of exchange of
goods and capital.

 Political - political globalization is the creation of a world government which regulates the
relationships among nations and guarantees the rights arising from social and economic
globalization.
 Cultural - growth of cross-cultural contacts; advent of new categories of consciousness and
identities such as Globalism - which embodies cultural diffusion, the desire to consume and
enjoy foreign products and ideas, adopt new technology and practices, and participate in a
 "world culture"; loss of languages (and corresponding loss of ideas), also see Transformation
of culture .

 Social - increased circulation by people of all nations with fewer restrictions. Provided that
the people of those nations are wealthy enough to afford international travel, which the
majority of the world's population is not. An illusory 'benefit' recognized by the elite and
wealthy, and increasingly so as fuel and transport costs rise.
 World-wide pop culture such as Pokémon, Sudoku, Numa Numa, Origami, Idol series,
YouTube, Orkut, Facebook, and MySpace. Accessible to those who have Internet or
Television, leaving out a substantial segment of the Earth's population.
 World-wide sporting events such as FIFA World Cup and the Olympic Games.
 Formation or development of a set of universal values - Homogenization of Culture

Criticism of Globalization:

• Yet faster growth has its cost, too. The reduction in poverty worldwide has negative
environmental consequences.

• Close to one percent of the world's rainforest is disappearing every year because of
expanding agriculture and trade in forest products.

• The closely knit global communication network that makes growth possible has also made
the world as a whole more vulnerable to everything from disease and mischief to terror.
• HIV infection in humans developed in Africa and South America but has spread to the entire
world, now infecting some 14,000 people each day.

• In 1997, in barely five hours the "I love you" computer virus released by pranksters in Manila
wreaked $700 million worth of damage worldwide. The September 11 hijackers made use of
electronic transfers of funds to finance their operation. They also relied on the Internet to
coordinate their moves and buy airline tickets.
• Since the attacks, Osama Bin Laden's favourite means of communicating with the world
from his cave has been satellite TV.

• Not that any of this mixture of the good and the bad is new. Throughout history, the
introduction of breakthrough technologies has brought disruption, and created winners and
losers.
• When the Old World connected with the New World through colonizers and explorers, new
pathogens like small pox and influenza caused a "demographic holocaust," killing three out
of every four Native Americans.
• The colonization of the Americas and vast parts of Asia, Africa, the Middle East and Latin
America, has destroyed traditional social structures and political power while speeding up
the process of economic integration. The need for labour to mine silver and work the
plantations resulted in the transfer of some 10 million slaves from Africa.
• On the other hand, the economies of Europe and Asia boomed, fuelled by the flow of
precious metals and new commodities.
• A vast majority of some 60 million people who left their place of birth in the most intense
period of globalization in the late 19th century went to the US. Immigrants and slaves built
the richest nation in history.
• They drew upon world resources - starting with the water mill and steam engine technology
from Britain - and emerged as a leading innovator and the most potent engine of
globalization. With the American victory in the World War II Pacific arena and the launch of
 the Marshall plan, US economic and military power has spread to far corners of the world,
culminating in the end of the Cold War.
• The fall of the Berlin Wall symbolized the end of a global ideological division and gave a
boost to the latest burst of globalization itself.
• It is no wonder many around the world see - and resent - globalization as a euphemism for
Americanization.
• No other country has played as significant a role in reconnecting the world as the United
States, itself an early product of modern globalization.

Conclusion:

• While globalization has created unprecedented riches, many people have also been left
mired in poverty.
• Industrialized countries with developed infrastructure, institutions and education, and
middle income countries which opened up the economy have benefited most from
globalization, but the poorest countries have not grown, or in some cases have even go
back.
• Thus despite the overall fall in the rate of poverty, close to a third of the world population
still lives in utter poverty without access to electricity or drinking water.
• The gap between the rich and the poor countries and between the wealthy and the indigent
within countries has also widened.
• The rules of global engagement that have evolved, and the institutions that manage them -
from the International Monetary Fund to the World Trade Organization - reflect the power
imbalance between wealthy and poor nations.
• International Job opportunity and cross cultural management welcomed approx. 2 million
migrants across the glove.

References:

1 Dowling, Peter. J, Festing .M & S.R Engle A.D. (2012). International Human Resource
Management (Fifth Edition). New Delhi: Excel Books.
2 Edwards Tony & Rees Chris (2007). International Human Resource Management:
Globalization, national systems and Multinational companies. New Delhi: Pearson
Publication.
3 Gupta, S. C (2006). International Human Resource Management – Text & Cases Second
Edition). New Delhi: MACMILLAN India Ltd.
4 K. Aswathappa (2007). International Human Resource Management – Text & Cases (
First Edition). New Delhi: McGraw Hill Education.
5 Mead & Richard (2005). International Management: Cross-cultural Dimensions.
London: Blackwell Publishing.
6 Tayeb, Monir H (2003). International Management - Theories and Practices.
New Delhi: Prentice Hall/Pearson Education.
7 Tayeb, Monir H. (2005). International Human Resource Management: A
Multinational Company Perspective. New Delhi: Oxford University Press.
8 Venkat Ratnam, C. S. (2001). Globalization and Labour-Management Relations:-
Dynamics of Change. New Delhi: Response Books.

Compiled and prepared by:

Dr. Shyamal Gomes