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To view the development in the long run, the topic of human resource management (HRM) has become one of the most documented in the literature about management (Boxall, 1995). Managers and policymakers now want to know how human resources (HR) are managed in different regions all over the world and how their counterparts in different parts of the globe react to or perceive similar pressures and concepts. Furthermore, the increased level of globalization and internationalization of business, the growth of new markets (such as in India, Eastern Europe, South East Asia, China, and Latin America), growth of new international business blocs and an increased level of competition among companies at both local and foreign level has led to an increase in comparative HRM studies (Brewster, Tregaskis, Hegewsch and Mayne, 1996; Clark, Gospel and Montgomery, 1999). It is also important to have a full understanding about the main determinants of HRM policies and practices in different national and regional settings . Rondeau and Wager (2001) focused on the ability of certain 'progressive' or 'high performance' HRM practices to enhance organizational effectiveness, noting growing evidence that the impact of various HRM practices on performance is contingent on a number of contextual factors, including workplace climate.
The researchers react positively to the challenges raised by the globalization of business and investigate a number of issues and problems which is associated with international business (Hendry, 1996). They have tried to testify and examine management from a cross national view point. This comparison of HRM practices and policies at a national level helps to examine the convergence and divergence thesis. The typical questions pursued by comparative researchers are (Pieper, 1990): (1) What is the effect of national factors such as government policy, culture, and education systems? (2) What are the differences and similarities? (3) What is put into practice? (4) What strategies are discussed? (5) How is HRM structured in individual countries? Researchers have also developed and proposed different models of HRM both between and within regions (Boxall, 1995; Brewster, 1995; Guest, 1997). A lot of models of HRM have a different base. As such, from the view of globalization, principles of HRM have been developed from a restricted sample of human experience to a wild level. During the infancy stage of HRM literature, such an ethnocentric approach was unavoidable and understandable and this may be an important factor in business. However, with the growth of a ‘‘global business village,’’ companies operating in different regions need appropriate information and guidance to develop their HRM practices and policies. For further developments in the field of HRM, it is important to have a framework, which can enable us to conduct such an analysis. Some researchers have emphasized a practical ‘best practice’ framework for diagnosing HRM practices. Hiltrop (1996) shows 11 dimensions of HRM, which can be used for evaluating the effectiveness of HR practices. These dimensions can also be used to benchmark HR activities and the relative influence of the best practices on organizational outcomes.
The globalization promotes the development of the Human resource management development to some extent or at least the globalization is an important factor in HRM. With the perceived power to influence, and even override nationally specific HRM with transfer of common or best HRM practices, globalization leads to the convergence among different systems. The popular of this tendency may keep HRM more distinctive. With the developing of the economy and the gradual perfection of the institution, MNC has faced varieties of challenges .
The key issues in the process of globalization may be: what leads to the convergence; what practices are the ‘best’ for companies. Via the opening up and penetration of economies to external forces and influences, globalization has serious impacts on HRM. This comes from two aspects, with both local and foreign multinational enterprise operations and investment leading to exposure to other countries’ HRM practices, greater publicity and even direct importation. The Japan first imitating their practices in 1980s first attract the attention all over the world. (as in Ford’s ‘After Japan’ and Malaysia’s ‘Look East’ campaigns) and the so-called ‘Japanization’ of industries. Globalization’s universalizing tendencies and implications can be located within work of long antecedence (Kerr et al, 1962) and more recent exponents (Peters & Waterman, 1982; Womack et al., 1990). For management an implication is that there were ‘universal truths’, including in HRM, that could be applied everywhere . A central proposition is that because of political, technological forces, economic, social and now including globalization, there is a worldwide tendency for countries, and within them HRM, to become similar as the copying and transfer of practices, sometimes taken as ‘best practices’ and linked to, was encouraged. In short, HRM systems would converge. The convergence all over the world is in process. Other than the globalization, the reason for convergence may be the development of institutional theory. Under this background, practices are adopted not because of ‘effectiveness’, but because of three specific social forces (McKinley et al., 1995). First, ‘constraining’ forces play an important role. This shift from overlooking practice to emphasizing in social constraints subsequently encourages firms to conform to legitimate structures and management activities. Second, ‘cloning’ forces, which pressurize firms to mimic the actions of leading companies in the face of challenge and uncertainty. Third, ‘learning’ forces, which are shaped through processes in educational institutions and professional associations, also are dominant.
HRM practices and policies in a cross-national background are influenced by both national and organizational culture, institutions, and industrial sector dynamics and others factors, such as age, size, nature, and life cycle stages of organization (Hofstede, 1993; Brewster, 1995; Jackson and Schuler, 1995; Sparrow, 1995). The direction and degree of effect of these factors varies from region to region (Locke and Thelen, 1995; Jackson and Schuler, 1995). For example, the response of unions to common competitive pressures (such as the introduction of new production technologies, large scale restructuring and re-engineering of organizations, and pressure to increase work flexibility) varies across different countries. Union membership has declined in countries such as the UK, France, or the US, whereas in Australia and Germany, it has remained stable.
With the development of the globalization, there is a shift from manufacturing to services in HRM . First, the difference about manufacturing and services are presented. According to Standard Industry Classification (SIC) definitions, manufacturing establishments are engaged in the mechanical or chemical transformation of substances or materials into new products while service are engaged in providing a wide variety of services for individuals, business and government establishments, and other organizations. Perhaps most importantly, the literature has long noted important differences between manufacturing and services firms (McColgan, 1997). Service operations have unique characteristics which are rarely found in manufacturing including intangibility, inseparability of production and consumption, heterogeneity, customer participation, and labor intensity (Nie and Kellogg, 1999). The direct participation of customers in the service process adds complexity that is generally not found in manufacturing (Chase and Tansik, 1983). Moreover, direct customer participation means that service firms tend to have many more physical sites than manufacturers along with the unique challenges presented by wide geographic dispersion.Intangibility is often considered as another fundamental difference between services and goods since a service cannot be touched, seen or tasted in the same manner as a manufactured product (Fitzsimmons and Fitzisimmons, 1997). Services also tend to have higher heterogeneity and thus can be either deliberately or accidentally customized between different service providers and customers in comparison to the greater process standardization of a typical manufacturer’s production. Services are likewise more perishable than physical products given that unused capacity is lost forever. Finally, services are typically more labor intensive in comparison to manufacturing (Heskett, 1986) and hence manufacturers can often realize more productivity gains through technological innovations (Quinn and Gagon, 1986).
Services make a lot of contributions to production, mainly through their direct contribution to total output and final demand, but to some extent also through their indirect contribution through other sectors. However, services are more independent from other sectors than the manufacturing industry. Most inputs which are necessary to produce services are derived from the services sector itself. Furthermore, their role as providers of intermediate inputs to other sectors is not yet as strong as that of the manufacturing sector. Dirk Pilat (2005) shows that a growing number of workers in the manufacturing industry are engaged in services-related occupations. A broad definition of service-related workers, up to 50% of manufacturing workers are in such occupations. He, using firm-level data the paper finds that, despite evidence on a growing number of services turnover within the manufacturing sector, manufacturing enterprises in most countries are not very diversified in their constituting establishment, i.e. they do not have many establishments engaged in services production. Canada is a notable exception in this respect. In other countries, it is likely that diversification primarily occurs at the level of the enterprise group. On the other hand, data on products suggest that manufacturing firms appear to derive a growing share of turnover from services, notably in countries such as Finland and Sweden .
A prime example of this has been in the area of employee relations where ‘Human Resource Management’ has gained increasing acceptance in preference to ‘personnel management’. This change and improvement is happen under the background of the opening up and reforming in China. The market-oriented strategy is in great need of advanced management thoughts. HRM represents neither the latest management whim, nor simply the preference for a new label, but rather constitutes a key issue within contemporary work organizations. The researchers updates HRM gradually both in conceptual and empirical foundations. However, there are some different opinions. Some argue that HRM is no more than ‘good’ personnel management. Given the dearth of empirical evidence on HRM,the original book and literature provide a valuable reference for personnel and other managers interested in gaining a more comprehensive understanding of the changes in approach which are occurring in the way people at work are managed. Up to now, more literature has found a lot of evidence to support the operation of HRM and it indeed provide a lot of benefits for the firms.
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