(240)-343-2585

 

When you post your responses, you must use the resources from the class. Occasionally it may be helpful to search other resources, and some assignments may call for additional research, but in the Discussion area, I am really looking for evidence that you read the course material and can apply it. 

Question 1: Global HR differs from domestic HR in many ways. Describe two functions of HR (e.g. staffing, training, compensation) and how they are different in a global environment. 

Question 2: Describe in your own words, the difference between global and international. Be sure to use our reading (Globalization and HR) to support your description. 

Week 1 – What is Global HR? (Add weeks)

HRMN 467 6381 Global Human Resource Management (2222)

WHAT IS GLOBAL HUMAN RESOURCE MANAGEMENT?

Human resource management is one of the world’s fastest growing fields and presents

unprecedented opportunity for global advancement. The global human resource management course

prepares you to deal with all aspects of human resources within the worldwide context, including

US-based organizations doing business internationally and non-US-based organizations operating

worldwide.

Global Human Resource Management (HRMN 467) is a comprehensive study of global human

resource management. On completion of this course, you will be able to demonstrate intercultural

competencies, identify trends in the globalized workforce, and analyze policies, practices, and

functions in global human resources. To do this, you will design a strategic staffing plan that includes

recruiting, training, compensation, and evaluation. You will also complete a reflective exercise to

assess your intercultural competencies and discuss current trends in global human resources.

Week 1 Aligned to course outcome #

Describe the difference between an

international organization, a multinational

organization and a global organization.

3

Describe challenges associated with a

global workforce

3

To Do List:

1. Chapter 1 of the Bhebe book:

Content

Activities

Introduction to Global HR
PDF document

Globalization and Human Resource

Mangement
PDF document

Global Human Resources Management (Bhebe, 2019)

2. During week 1 we will begin by discussing the challenges of a global environment and the

definition of what it means to be a global workforce.

Read the Introduction to Global HR.

This text will give you a general overview of all the topics we will cover in Global HR. Keep it as your

primary resource. Then each week we will delve into a specific topic from this text.

To cite this resource:

UMGC (2018). Introduction to Global HR. Retrieved

from: https://learn.umgc.edu/d2l/le/content/334779/viewContent/11902932/View

3. Next, read Globalization and HR. To cite this resource:

Sims, R. (2019) Human Resources Management Issues, Challenges and Trends: “Now and Around the

Corner”, Information Age Publishing. pp. 31–52.

4. Participate in the weekly discussion

0 % 0 of 3 topics complete

Human Resources Management Issues, Challenges and Trends:
“Now and Around the Corner”, pages 31–52.
Copyright © 2019 by Information Age Publishing
All rights of reproduction in any form reserved. 31

CHAPTER 2

GLOBALIZATION AND HUMAN
RESOURCE MANAGEMENT

Ronald R. Sims

The environment in which today’s organizations find themselves continues to be
more globalized as the world is becoming a “global village.” This globalization
is driven in part by continued growth in multinational investment to include more
and more companies entering into alliances with foreign companies, exporting
their products overseas, and building plants in other countries. All of the human
resource management (HRM) challenges, issues and opportunities discussed in
previous chapters in this book are interrelated conceptually and operationally in
the international context.

This chapter discusses a number of the HRM challenges, issues and opportuni-
ties HRM professionals and their organizations will need to address in today’s and
tomorrow’s global world of work. The chapter first takes a look at today’s global
organization and some HRM issues. Next, the discussion turns to the globaliza-
tion of business and factors affecting HRM in global markets before focusing
on an analysis of levels of global or international and HRM operations. Finally,
the chapter discusses globalization and implications and impacts on HRM in the
future.

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AN: 2006258 ; Ronald R. Sims.; Human Resources Management Issues, Challenges and Trends: ‘Now and Around the Corner’
Account: s4264928.main.eds

32 • RONALD R. SIMS

TODAY’S GLOBAL ORGANIZATION AND
HUMAN RESOURCE MANAGEMENT ISSUES

For the past decades, there have been profound changes in the international busi-
ness scene. With geographic national borders being almost replaced by multi-
national firms, and a heightened level of labor mobility around the globe, the
implication of HRM to design and develop firms’ global business strategy, and
to direct individuals (i.e. managers and professional staff alike) for working in
different countries, is undoubtedly significant. Rosalie Tung (2016) has recently
suggested that in the past three decades or so, globalization/regionalization, mi-
gration and reverse migration (also referred to as “brain circulation”), the ascen-
dancy of emerging markets, the demand for people with a global mindset, and
the worldwide war for talent have brought about fundamental changes to the na-
ture, magnitude, and raison d’etre for HRM in a global context. And, that these
changes require HRM professionals and their organizations to adopt new lenses to
fully understand the dynamics that impact global or international human resource
management policies and practices.

Organizations are attempting to gain competitive advantage, which can be pro-
vided by international expansion as these countries are new markets with large
numbers of potential customers. For example, organizations that are producing
below their capacity can use expansion to possibly increase sales and profits. Still
other organizations are building production facilities in other countries as a means
of capitalizing on those countries’ lower labor costs for relatively unskilled jobs.

Importing and exporting goods and services is the easiest way to “go global.”
India has the world’s second-largest population (1.2 billion people) and a grow-
ing middle class, so businesses are increasingly trying to expand their exports to
that country (U.S. News & World Report, 2016). According to Snell and Morris
(2019), Apple is one of those companies. Although the iPhone dominates the U.S.
market, only 5 percent of smartphones in India are iPhone. Partnerships, mergers
and takeovers are other ways companies are addressing globalization.

The reality is that most organizations now function in the global economy.
For example, U.S. businesses are entering international markets at the same time
that foreign companies are entering the U.S. market. Consider the reality that
many American and foreign firms have partnered with Chinese firms to expand
in China, which is the world’s most populous country, with 1.3 billion people.
In turn, cross-border mergers continue to increase (Noe, Hollenbeck, Gerhart &
Wright, 2019; Shen, 2016) as Chinese and other foreign companies are merging
with American firms (Sheng, 2016). Consider also that it has been suggested that
globalization is the dominant driving force in the world economy, reshaping soci-
eties and politics as it changes lives (Cascio, 2019).

Globalization has also resulted in the blurring of national identities of prod-
ucts. Many may think of Budweiser as an American beer, but its maker (Anheus-
er-Busch) is owned by a Belgian company called InBev. Like many other compa-
nies, Anheuser-Busch InBev has been purchasing or partnering with factories and

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Globalization and Human Resource Management • 33

brands in other countries such as China and Mexico to expand its sales. Similarly,
BMW is a German brand, but the automaker builds cars in the United States, Chi-
na and elsewhere (Choi & Schreiner, 2014; Duprey, 2013; Snell & Morris, 2019).

Giant multinational corporations such as Nestlé, Unilever, and AstraZeneca,
began to lose their national identities as they integrated and coordinated product
design, manufacturing, sales, and services on a worldwide basis. Further, many
other U.S. firms, for example, generate a substantial portion of their sales and
profits from other countries; companies such as Coca-Cola, Exxon/Mobil, and
Microsoft derive a significant portion of total sales and profits from outside the
United States (Dewhurst, Harris & Heywood, 2012). In 1982 GE, for example,
generated 20 percent of its sales outside the United States and 70 percent in 2017
(Mann & Spegele, 2017). Many foreign organizations have taken advantage of
growth opportunities in the United States. For example, Toyota, based in Japan,
has grown its market share and increased its number of jobs in the United States
and elsewhere in North America. Also, Toyota, Honda, Nissan, and other Japa-
nese automobile manufacturers, electronic firms, and suppliers have maintained
operations in the United States (Mathis, Jackson, Valentine, & Meglich, 2017).

Higginbottom (2017) has recently argued that these are indeed “uncertain
times” (i.e., for global (and local) organizations and HRM professionals). The
last several years have played host to seismic political events such as Brexit and
the election of Donald Trump as the U.S. president in 2016. The acronym VUCA
which stands for volatility, uncertainty, complexity and ambiguity is a trendy
management term that perfectly encapsulates the conditions that many multina-
tionals are operating under.

Brexit, for example, which stemmed from a slim majority of U.K. voters de-
ciding in a June 23, 2016 referendum, that they no longer wanted to be governed
largely from a bureaucracy located in Brussels, Belgium, continues to pose a seri-
ous threat to the European Union. The EU and Britain are currently negotiating
the terms of their separation which will have major implications for global busi-
nesses and many observers predict that, at least in the short term, this exit will
have a negative impact on the British economy (see, Amadeo, 2018a; Partington,
2018; Romei, 2018).

Numerous free-trade agreements forged between nations over the past 60
years, like the General Agreement on Tariffs and Trade (GATT) in 1948 and the
North American Free Trade Agreement (NAFTA) in 1994, helped quicken the
pace of globalization. However, the election of Donald Trump as president of
the U.S. in 2016 has created uncertainty for organizations making their location
decisions in his efforts to renegotiate, for example, NAFTA which is the world’s
largest free trade agreement. In an effort to keep companies from moving produc-
tion outside the United States, Trump announced a 35 percent tariff on steel and a
10 percent tariff on aluminum on Canada, Mexico and the EU. President Trump
campaigned on renegotiating NAFTA and frequently berated companies seeking

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34 • RONALD R. SIMS

to build plants in Mexico, for example, particularly when it entails closing plants
in the United States (see Amadeo, 2018b; Stoll & Colias, 2016).

While factors like Berxit and the election of Trump as the U.S. president are
impacting globalization, perhaps none is more important that the rise of Inter-
net technologies (Dreyfuss, 2017; Quora, 2017; Sato, 2014). The Internet, as it
continues to develop, has certainly changed the ways that people live and work.
Indeed, in some industries, such as music and e-commerce, it has completely
revolutionized the rules of the game (Cascio, 2019).

The Internet gives everyone in the organization, at any level and in every func-
tional areas, the ability to access a mind-boggling array of information-instanta-
neously from anywhere. Ideas can be zapped around the globe in the blink of an
eye instead of seeping out over month or years. A global marketplace has been
created by factors such as the following:

• Global telecommunications enhanced by fiber optics, satellites, and com-
puter technology.

• E-commerce that makes organizations global from the moment their Web
sites are up and running, as customers from around the world log on.

• Financial markets are now open 24 hours a day around the world (Lioudis,
2018).

• Cost pressures (that prod firms to move where labor and other resources are
cheapest), coupled with a search for new markets (as firms and consumers
around the world seek foreign goods and services).

• The integration of cultures and values through international travel, as well
as the spread of goods such as music, food, and clothing. In combination,
these have led to common consumer demands around the world (Tarique,
Briscoe, & Schuler, 2016).

• The emergence of global standards and regulations for trade, commerce,
finance, products, and services (Gunther, 2005).

The rapid increase in telecommunications and information technology en-
ables work to be done more rapidly, efficiently, and effectively all over the world.
Friedman (2016 has suggested that an expanding high-tech, information-based
economy increasingly defines globalization and shapes the business cycles within
it. That is, much of the flow of capital, labor, services, and goods among Asia,
America and Europe are technology based. Without chips, screens, and software
help from Asia, the U.S. economy would grind to a halt. Clearly, open borders
continue to allow new ideas and technology to flow freely around the globe, ac-
celerating productivity growth and allowing businesses to be more competitive
than they have been in past decades.

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Globalization and Human Resource Management • 35

Globalization and HRM

Due to globalization, companies have to balance a complicated set of issues
related to different geographies, including different cultures, employment laws,
and business practices, and the safety of employees and facilities abroad. HRM
issues underlie each of these and other concerns. They include such things as
dealing with employees today and tomorrow who, via the Internet and social me-
dia, are better informed about global job opportunities and are willing to pursue
them, even if it means working for competing companies or foreign companies.
Determining the knowledge and skill base of workers worldwide and figuring out
how best to hire and train them (sometimes with materials that must be translated
into a number of different languages) is also an issue for companies in the global
environment.

There is every indication that the recent social and political changes have con-
tributed to globalization and the movement toward international competition. De-
spite the reasons an organization may have for expanding operations globally,
HRM is critical to the success of any global initiative. If one adopts the basic prin-
ciple that HRM strategy must be derived from corporate strategy and that people
do determine an organization’s success or failure, then the HRM function needs
to be a key strategic partner in any global operations. Still, in some instances
HRM is often neglected in the planning and establishment of global endeavors.
Despite such neglect, today’s and tomorrow’s HRM professionals must continue
to develop their own and other organizational members competencies or skills in
the ever-growing international context of the world of work. This means not only
understanding the events and factors that continue to increase the global nature of
business but also their role in helping to improve their organization’s competitive
advantage in global environments.

UNDERSTANDING THE GLOBAL ENVIRONMENT

It is important for HRM professionals to continue to recognize that because politi-
cal, economic, social and technological conditions are constantly shifting around
the world, how employees are managed in those changing environments will need
to shift as well. HRM professionals can better understand the global environment
by regularly conducting a political, economic, sociocultural, and technological
(PEST) analysis which can act as an audit of a company’s environmental influ-
ences to assist in determining the corporate strategy and accompanying HRM
response(s) (see, for example, Post, 2017; Snell & Morris, 2019).

By conducting a PEST analysis HRM professionals and other organizational
leaders are able to scan different contextual environments to understand the long-
term trends and how they might impact a company. A PEST analysis can help
HRM professionals to 1) spot business or human resource opportunities, and give
them advanced warning of threats, 2) identify trends in the business environment
so they can proactively adapt to these changes, 3) help to avoid implementing

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36 • RONALD R. SIMS

HRM practices in a particular country where they may fail, and 4) put an end to
old habits and assumptions about how people should be managed to help bring
about innovative ideas for the entire organization.

Political Factors

Government regulations and legal issues affect a company’s ability to be profit-
able and successful, and this factor looks at how that can happen. Issues that must
be considered include tax guidelines, copyright and property law enforcement,
political stability, trade regulations, social and environmental policy, employment
laws and safety regulations. Companies should also consider their local and fed-
eral power structure and discuss how anticipated shifts in power could affect their
business.

HRM professionals can assess the political factors by examining a country’s
labor laws, property rights, and patents. When Lincoln Electric, the Ohio-based
welding company, for example, started operations in Brazil, they could not offer
their yearly bonus program based on performance because any bonuses paid for
two consecutive years became a legal entitlement (Siegel & Larson, 2009).

Property rights in many countries are poorly protected by governments. Who-
ever has the political power or authority can seize others’ property with few or
no repercussions. Civil unrest can also lead to the poor enforcement of property
rights. Businesses have less incentive to invest in countries or locate factories
in countries experiencing strife. Another issue that has implications for global
companies relates to the intellectual property rights—rights related to patents,
trademarks, and so forth.

Economic Factors

This factor examines the outside economic issues that can play a role in a
company’s success. Items for HRM professionals and other organizational mem-
bers to consider include economic growth, exchange, inflation and interest rates,
economic stability, anticipated shifts in commodity and resource costs, unemploy-
ment policies, credit availability, unemployment policies, and the business cycle
followed in the country.

By looking at trends around market and trade cycles, specific industry changes,
customer preferences, and country economic growth forecasts HRM profession-
als and other organizational members can best understand the economic issues
that are bound to have an impact on the company. For example, in 1995, the World
Trade Organization (WTO) was formalized as a cooperative forum for country
leaders to come together and increase free trade across the world. As of Decem-
ber 2017, the WTO member countries represented over 164 member-nations and
covered 97 percent of all international trade (Amadeo, 2018c). In addition, coun-
tries are continually negotiating free trade agreements with each other in hopes of
increasing their economic activity.

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Globalization and Human Resource Management • 37

Since China joined the WTO in 2001, its economy has grown dramatically,
drastically altering its political and trading relationship with many nations. In a
strange twist of fate, Xi Jinping, the leader of the communist world and China’s
president, has taken to defending free trade and globalization, whereas U.S. presi-
dent Donald Trump, leader of the free world, has taken to attacking them as noted
previously (Elliott & Wearden, 2017).

Sociocultural Factors

The sociocultural factor analyzes the demographic and cultural aspects of the
company’s market. These factors help companies examine consumer needs and
determine what pushes them to make purchases. Among the items that should be
examined are communications, religion, values and ideologies, education, social
structure, demographics, population growth rates, age distribution, cultural limi-
tations, lifestyle attitude, attitudes towards work and job market trends.

An understanding of sociocultural factors has important implications when it
comes to a company’s decision about when and how to do business in a country.
For example, because of low labor costs and language similarities, many U.S.
businesses have found India an attractive place to locate their facilities, particu-
larly call centers.

By recognizing and accommodating different ideologies, religious beliefs,
communication styles, education systems, and social structures, HRM profession-
als and other organizational members stand a better chance of understanding the
culture of a host country—a country in which an international business operates.
Even in countries that have close language or cultural links, HRM practices can
be dramatically different. For example, employers might be expected to provide
employees with meals while at work and transportation between home and work.
In most of the Islamic Middle East, it is completely acceptable to ask coworkers
very personal questions about their children, especially their sons, but never about
their wives (Tulshyan, 2010; Vollmer, 2015).

Technological Factors

Technology issues affect how an organization delivers its product or service
to the marketplace. Specific items that need to be scrutinized include, but are not
limited to, government spending on the maturity of manufacturing equipment,
information systems, technological research, technological advancements, the life
cycle of current technology, the role of the Internet and how any changes to it
may play out, and the impact of potential information technology changes. Even
in less-developed countries where manufacturing is typically stronger due to low
cost of labor and high cost of capital-intensive equipment, labor-saving technolo-
gy is becoming more affordable and accessible. Take, for instance, a textile factor
in Vietnam. It is more cost effective for the factory to purchase high-tech thread-
ing equipment to spin the cotton into thread than to hire hundreds of people to

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38 • RONALD R. SIMS

thread the cotton by hand, even when the average wage for such employees is less
than $100 a month. Just like the other factors, companies should consider genera-
tional shifts and their related technological expectation to figure out how they will
affect who will use their product and how it’s delivered (Snell & Morris, 2019).

While advances in technology have pushed for more service-based jobs, infor-
mation systems and technology platforms have also increased the rate at which
these services can be traded across countries. Along with the creation of the WTO,
1995 also signifies the beginning of the Internet era mentioned early which is a
major driver of the increase in globalization.

Table 2.1 provides an example of PEST analysis that can give HRM profession-
als and other organizational members a clear understanding of how this works:

Every country varies in terms of its political, economic, sociocultural and tech-
nological systems. These variations directly influence the types of HRM systems
that must be developed to accommodate the particular situation. The extent to
which these differences affect a company depends on how involved the company
is in global markets.

Today, employees around the world continue to become empowered to com-
pete without the need of a large company. For example, many websites such as
guru.com have developed an online marketplace where individuals can offer vari-
ous services and compete for business throughout the world. Consider the reality
that one might be interested in developing a new website for their company. By
going to the Internet one can select various individuals offering specific services.
They may be from different parts of the world. In conclusion, these PEST factors
shift the way companies are formed and how they and their HRM professionals go
about managing their human resources in a global environment.

ANALYZING A COMPANY’S LEVEL OF
INTERNATIONAL AND HRM OPERATIONS

Today’s international business operations can take several different forms. A large
percentage of these operations carry on their international business with only lim-
ited facilities and minimal representation in foreign countries. Others have exten-
sive facilities and personnel in various countries of the world. Managing these

TABLE 2.1. Sample Pest Analysis

Political Economic Sociocultural Technical

• New state tax policies
for accounting

• New employment
laws for employee
handbook maintenance

• Political instability in a
foreign partner country

• International economic
growth

• Changes in interest
rates

• Shift in educational
requirements and
changing career
attitudes

• Population growth rate

• Automated processes
in the industry

• Rate of innovation
• Changes in technology

incentives

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Globalization and Human Resource Management • 39

resources effectively, and integrating their activities to achieve global advantage,
is a challenge to a company’s leaders and HRM professionals.

Often we hear companies referred to as “multinational” or “international.”
However, it is important for HRM professionals to understand the different levels
of participation in international markets. This is especially important because as
a company becomes more involved in international trade, different types of HRM
challenges, problems, and opportunities arise.

Bartlett and Ghoshal (1991) identified the following four international organi-
zational models:

• Decentralized federation in which each national unit is managed as a sepa-
rate entity that seeks to optimize its performance in the local environment.
(This is the traditional multinational corporation).

• Coordinated federation in which the center develops sophisticated man-
agement systems enabling it to maintain overall control, although scope is
given to local management to adopt practices that recognize local market
conditions.

• Centralized hub in which the focus is on the global market rather than on
local markets. Such organizations are truly global rather than multinational.

• Transnational in which the corporation develops multi-dimensional stra-
tegic capacities directed towards competing globally but also allows local
responsiveness to market requirements.

Adler (2008) offers another categorization of the four various levels of inter-
national participation from which a company may choose and includes the fol-
lowing levels of involvement or participation: domestic, international, transna-
tional, multinational. The four basic types of organizations differ in the in degree
to which international activities are separated to respond to the local regions and
integrated to achieve global efficiencies.

Domestic. Most organizations begin by operating within a domestic market-
place. For example, a business that starts in the U.S. marketplace must recruit,
hire, train, and compensate their employees who are usually drawn from the local
labor market. The focus of the selection and training programs is often on the
employees’ technical competence to perform job-related duties and to some ex-
tent on interpersonal skills. In addition, because the company is usually involved
in only one labor market, determining the market rate of pay for various jobs is
relatively easy.

As the company grows it might choose to build additional facilities in differ-
ent parts of the country to reduce the costs of transporting the products over large
distances. In deciding where to locate these facilities, the company must consider
the attractiveness of the local labor markets. Various parts of the country may
have different cultures that make those areas more or less attractive according to
the work ethics of the potential employees. Similarly, the potential employees in
the different areas may vary greatly because of differences in educational systems.

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40 • RONALD R. SIMS

Finally, local pay rates may differ. However, it is important to note that in most
instances, companies functioning at the domestic level face an environment with
very similar political, economic, sociocultural, and technological situations, al-
though the variation might be observed across states and geographic areas.

International. As more competitors enter the domestic market, companies face
the possibility of losing market share; thus they often seek other markets for their
products. This usually means entering international markets, initially by exporting
products but ultimately by building production facilities in other countries. The
international corporation is essentially a domestic firm that builds on its existing
capabilities to penetrate overseas markets. Companies such as Procter & Gamble,
Honda and General Electric used this approach to gain access to Europe—they es-
sentially adapted existing products for overseas markets without changing much
else about their normal operations (Snell & Morris, 2019).

The decision to participate in international competition raises a host of HRM
issues. All the problems regarding locating facilities are magnified. For example,
HRM professionals must consider whether a particular location provides an en-
vironment where human resources can be successfully acquired and managed.

Global. The global corporation, on the other hand, can be viewed as a multina-
tional frim that maintains control of its operations worldwide from the country in
which it is headquartered. Japanese companies, such as NEC and Matsuhita, tend
to treat the world market as a unified whole and try to combine their activities in
each country to maximize their efficiencies on a global scale. These companies
operate much like a domestic firm, except that they view the whole world as their
marketplace.

Global organizations compete on state-of-the-art, …