Unit II Define Global Environment, Global competition, Global

sourcing of labour
Learning Objectives

To understand

1. Global Environment
2. Global Competition
3. Global Source of Labor
Introduction-HR in a Global Environment

• HR professionals are faced with addressing global issues on an

ever-increasing basis.
• This is true even for organizations that historically only operated
in a domestic environment.
• Issues include global competition for products and services,
global talent management, risk and privacy, understanding
global diversity and cultural issues, flexible reward systems,
leadership challenges, and managing international assignments.
 GLOBAL ENVIRONMENT
Global Environment is that part of business environment which includes the
international environment of a business, comprising of various other economies,
countries and the forces which are outside the business but can affect its
performance.
With the increase in globalization, global environment has become one of the major
forces which affects the business. The changing level of international economic
policies, the integration of various businesses, the involvement of various factors
into one are the major players which are affecting the business performance.
 Global Environment(1)
 Global Talent Environment
• Dealing with 24/7 global operations
• Millennial / generational differences regarding values and workplace
expectations
• Intellectual capital and knowledge transfer
• Mobility issues
• Market skill shortages and competition for talent
• Phased and early retirement issues

 Technology and Privacy Issues

• Global technology, data collection, and privacy regulations must be understood
• HRMS tools must be configured to determined appropriate system design
accounting for tracking personal data, currency conversion, language, pay rates
and frequency methods combined with data encryption.
 Global Environment(2)
 Global Economy
• New competitors, changing labor markets, labor force availability, currency and inflation factors,
tariffs, customs and import laws, grease payments and corporate social responsibility within
global markets must be considered including:
• New and emerging labor markets
• Inflation and corporate/employee taxation
• New skills sets
• Unemployment levels and
• discontent among the workers etc
 Global Environment(3)

 Understanding Cultural Diversity

• Different cultural norms and nuances, color and numerology issues, gestures,
societal norms, power/distance relationships, recruiting efforts and performance
management must be clearly understood on a country by country basis.
 Agility with Reward Systems
• On a country by country basis,
• A total reward philosophy statement may provide guidance to assist in developing
global systems based on what is provided by the home country, normative
practices, taxation levels and employee expectations.
• For example, in some countries the government provides comprehensive health
care, life insurance, disability and retirement plans.
 Global Environment(4)
 Managing Global Leadership
• Effective global leaders have several key characteristics, many of which are similar to any
leadership role such as integrity, trust, interpersonal communication skills, people development,
vision, problem solving and strategic planning.
• Some of the key differences are greater flexibility and agility to adapt, appreciation for subtle and
not so subtle cultural nuances, diversity and inclusion awareness, influencing skills, international
business experience along with the ability to travel internationally.
 Managing International Assignments
• Most organizations do not handle expatriation and repatriation well. In general, there is a lack of
assignee assessment and preparation including family interviews, broader cultural and language
training, ongoing feedback and discussion, visa requirements, knowledge of local customs and laws,
tax reconciliation and identification of the repatriation process.
 Global Competition
 Global Competition is relevant for the companies and organisations which have their business in multiple
countries.
 The organisations which have their businesses and operations in multiples nations or countries are often
faced with challenges in respect to the supply and demand of labour forces.
 The growing globalisation has led to formation of a link between nations and various strategies have been
developed for increasing mobility of people around the world. This increased mobility has led to the
increasing supply of labour in various countries and increased labour has provided a large pool of
competencies and talent around the world.
This has also led to various problems regarding labour such as attrition, migration, brain washing,
dissatisfaction and discontent among the workers etc
 Global Source of Labour
 Deciding on the mix of local employees, employees from the home country, and
even people from third countries that will best meet organizational goals
 In staffing an overseas operation, cost is a major factor to be considered.
 To meet these needs, organizations are outsourcing various functions, citing gains
in cost effectiveness, expertise, and efficiency
Factors that are most likely to be causes of concern for an employee
sent overseas
 Types of International
Employees
International employees can be placed in three different classifications.
• An expatriate is an employee working in a unit or plant who is not a citizen of the country
in which the unit or plant is located but is a citizen of the country in which the organization
is headquartered.
• A host-country national is an employee working in a unit or plant who is a citizen of the
country in which the unit or plant is located, but where the unit or plant is operated by an
organization headquartered in another country.
• A third-country national is a citizen of one country, working in a second country, and
employed by an organization headquartered in a third country.

• Each of these individuals presents some unique HR management challenges. Because in a

given situation each is a citizen of a different country, different tax laws and other factors
apply. HR professionals have to be knowledgeable about the laws and customs of each
country. They must establish appropriate payroll and record-keeping procedures, among
other activities, to ensure compliance with varying regulations and requirements.