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Globalisation and IHRM: partners in comparative

perspective?

Stephen J. Perkins
Department of Management and Professional Development, London Metropolitan
University (North Campus), London, UK

Keywords (Brewster et al., 2002, p. 7)? Thus


Comparative tests, Employment, Introduction: attributing meaning contextualised, how should Keep's (1992)
Globalization, Governance, to ``global'' development contention be (re)appraised that implicit in
Human resource management
The eponymous topic of ``globalisation'' may an HRM worth the name is a managerial
Abstract be interrogated from several angles: its predisposition to regard ``human capital''
Heuristically oriented, for implicit grounding in unitarist and development (a.k.a. training) as a strategic
pedagogic purposes, globalisation
neoliberal ideology; its status in relation to activity?
and international personnel
management and development socially embedded institutions; and its Comparative analysis facilitates attempts
trajectories are examined from a assumed universalism and ``run away'' ``to distinguish the essential from the
comparative perspective. The power (Giddens, 1999; Rowley, 2000). As the accidental, the simple from the complex, the
paper concludes that a normative same may be argued in relation to the HRM
operational definition of the
primary from the derived'' (Thomas and
paradigm, there is merit in exploring Znaniecki, 1974, p. 17, cited by Guth and
human resource management
(HRM) paradigm may be partnered emerging parallel trends in both areas. Can Schrecker, 2002, p. 292). Comparative
with attempts to diffuse a HRM internationally be perceived as variation in the ways academic
neo-liberal inspired corporate globalisation's junior partner? Human
governance regime
commentators approach the concept of
resource management as an international ``globalisation'', and the consequences for
internationally. However, caution
is expressed against uncritical discipline (IHRM) is an emerging area of people management and development, may
determinism. There is evidence academic study, development of which is profitably be evaluated heuristically.
from emergent studies that presently deficient in integrating theory and
institutional factors offer scope for
Tensions in management practices that vary
practice (Cheng and Cooper, 2003). Every
diverse interpretations of between countries and companies, and
organisation is faced with the problem of
international HRM (IHRM) globalisation as a process ``held to make
experimentation observable utilising, and hence managing in some way
practices more homogeneous'' (BeÂret et al.,
across different jurisdictions. human resources, from which it may be
Throughout, the paper enquires as
2003), may be similarly examined. A heuristic
inferred that ``[h]uman resource
to the empirical research evaluation may be defined as a method for
management (HRM) is universal'' (Brewster,
questions interrogation of this surfacing problems of concept utility as part
material give rise to, with 2001, p. 255). Adopting a comparative
of an iterative design process (Nielsen, 1994)
implications for those associated perspective, do ``globalising'' tendencies
with international training and imply a business organisation trajectory in ± in this case, design of a platform on which
development. the direction of a convergence of practice possible associations between economic
around a specific ideology or paradigm globalisation and normative HRM may be
informing HRM, therefore? Alternatively, in surfaced. Alternative perspectives are
spite of a universalising ideology, or presented below to compare and contrast the
``rhetorics'', of HRM (Legge, 1995), is the ways in which scholars are interpreting
presence of contextually embedded globalisation and its consequences for
tendencies (Cheng and Cooper, 2003; Schuler investment in human capital, theoretically
et al., 2002) likely to sustain a local character and in practice. This discussion is followed
in IHRM practice, even where the by outlining a stylised means of evaluating
organisational thrust is towards a common the trajectory of globalisation, corporate
set of corporate governance norms? In governance and concomitant employment
synthesis, do ``effective global HR strategies'' policies. The paper contributes to scoping the
ultimately depend on ``the ability to judge the empirical research agenda emerging from
extent to which an organisation should such considerations, giving rise to
Journal of European Industrial implement similar practices across the world implications for those involved in
Training or adapt them to suit local conditions'' trans-national training and development.
27/9 [2003] 461-472
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[ 461 ]
Stephen J. Perkins Australian Human Resource Institute
Globalisation and IHRM: The optimists Annual Convention, Grannell (a professor at
partners in comparative
perspective? A definition of globalisation is offered by the a Venezuelan institution) reported
Australian Department of Foreign Affairs perceptions from respondents in academe,
Journal of European Industrial
Training and Trade as a phenomenon ``driven by many corporate business and consulting, surveyed
27/9 [2003] 461-472 factors, of which technology, the related across seven regions of the world.
mobility of people, goods and ideas, and a Globalisation was reportedly perceived as
liberal trading environment are perhaps the one of the most important and frequent
most obvious'' (McKenna, 2000, p. 75). A external trends and ``a worldwide pressure''
comparison of attributed meaning may be for organisational change (Grannell, 2000).
undertaken drawing on commentary on This ``globalisation factor'' (42 per cent) was
globalisation from five alternative followed closely by technology advances (40
disciplines: namely, economics, strategy, per cent), skill shortages (36 per cent) and
marketing, and organisation studies (Floyd, competition (33 per cent). Notwithstanding
2001), as well as cultural studies (Taylor, these general findings, the rank order of
2000). Economists emphasise the ``freeing up importance of globalisation differed between
of labour and capital flows'' (Floyd, 2001, the regions canvassed. Europeans, Japanese,
p. 109). Business strategy writers define American and Australian respondents put
globalisation as applicable to an industry globalisation as one of the strongest trends.
``when it can achieve a competitive By comparison, Asia-Pacific (excluding
advantage from being global'', although Australia), Canadian and Venezuelan
Floyd points out that there is a continuum respondents gave top ranking to other trends
from the economists' theorising, concerned such as domestic and global instability,
with the trade advantages associated with technology and competition, suggesting the
``efficiency and low cost labour'' (Floyd, 2001, need to seek out contrasting perspectives[1].
p. 111). Rather than solely focusing on the
freeing up of capital and labour flows
internationally, a management issue arises The critics
in this connection, given the emphasis on
multinational companies' (MNCs) Organisation theorists have criticised the
requirement to make increasing use of global globalisation concept for being weakly
networks, and to manage operations specified (Floyd, 2001, p. 112). By surfacing
world-wide to supply various regions of the some of the prerequisites for true
world with global products. globalisation, these commentators illustrate
Business/marketing commentators are cited the barriers to an allegedly inexorable
by Floyd (2001) as suggesting that tendency (Giddens, 1999). ``A truly global
globalisation arises from the interaction of economy would be one in which national
modern technology and consumerism. The processes are subsumed in and transformed
first (transport and ICT) extends the global by international markets and conditions of
reach through an increased capacity to production'' (Hirst, 1997, cited by Floyd, 2001).
disseminate information and to deliver Rather than globalisation, identification of a
larger quantities of goods and services ``regionalisation'' tendency may thus be more
profitably across national borders. The latter apposite. ``[F]ully global companies are few
is concerned with the convergence of and far between, in addition to the fact that
national cultures making ``products'' saleable the formation of trading blocs[2] supports
as ``desired''. trade within the bloc rather than outside''
While it is possible to contrast the above (Floyd, 2001). Thus, Omahae explains
descriptions, they share an optimistic or globalisation as the result of attempts by
uncritically functionalist orientation. firms to insure against currency exchange
Defining globalisation as ``[a]ttracting rate volatility: they ``need to be in regions in
foreign investment, while increasing exports order to neutralise these effects'' (Floyd, 2001,
and developing international alliances to p. 113). Despite attempts by certain
penetrate new markets'' (Granell, 2000, p. 89) proponents to reify an economic
reassuringly concludes that ``[g]lobalisation manifestation (viz. the role of ``the market''),
does not mean eliminating differences, writing from the perspective of social
imitating others, or allowing more developed geography and cultural studies, Taylor (2000)
nations to impose their models'' (Granell, categorises ``the globalisation discourse'' as a
2000). For Granell globalisation ``means social construction. While on the surface
integrating differences, putting together our based on an objective assessment of the
strengths, building from the differences and ``facts'', this technocratic discourse may also
being able to join efforts for a win-win be thus perceived as a package of economic,
process'' (Granell, 2000). In an address to the political and social phenomena intended to
[ 462 ]
Stephen J. Perkins serve a hegemonic function (i.e. adopting the learning to operate in diverse cultural
Globalisation and IHRM: moral high ground to sanctify a politically settings?'' (O'Keeffe, 2003, p. 238).
partners in comparative O'Keeffe (2003, p. 233) contends that the:
perspective? interested position, by extension denigrating
alternative perspectives as irrational). ``. . . advent of the global economy has brought
Journal of European Industrial
Training Promotion of the superiority of the a realisation that the only lasting competitive
27/9 [2003] 461-472 ``American way'' at the beginning of the advantage is an organisation's ability to
twenty-first century is exemplified by Floyd's effectively exploit intellectual capital''.
(2001) allegation of an Americanisation in In consequence it may be proposed that
marketing activity to this end. investment in training by MNCs: ``. . . plays a
Chiming with this orientation, McKenna vital role in securing . . . motivation,
(2000, p. 74) draws on the definition cited development and deployment of [human
earlier, from the Australian Department of intellectual capital] directed in such a way as
Foreign Affairs and Trade, to argue that the to maximize its potential. Companies that,
term ``globalisation'' is ``inextricably linked for whatever reasons, are inclined to treat
with neo-liberal ideology and technophilic their employees simply as a cost or
hyperbole to produce questionable commodity, and who hence fail to invest in
`mantras'''. Globalisation sits alongside other training and development activity cannot
such ``mantric notions'' as enterprise, meaningfully be said to be practising human
efficiency, productivity, international resource management'' (Keep, 1992, p. 321).
competitiveness, trade liberalisation, the Navigation through the competing
information economy, and so on (McKenna, perspectives on globalisation may be
facilitated by a more theoretical treatment of
2000, p. 75). For McKenna they are (over)used
its phased substance and ideology, and the
to the point of meaninglessness, but as part of
potential consequences for people
a discursive construction of reality that
management and development as an allied
reinforces and naturalises the overarching
phenomenon.
rationality of a neoliberal political-economic
system. Thus they become a touchstone for
gaining closure over what is deemed
legitimate in policy debate (and what is not).
Theorising globalisation and its
Linkages are made as part of the overall
corporate consequences
discourse, such that terms such as enterprise Globalisation is represented as a very
(as in free enterprise ± a neo-liberal concept) ``current'' phenomenon, viewed from a
become unquestioningly associated with number of disciplinary and institutional
flexibility (e.g. in the market for waged vantage points (e.g. Hughes, 2002; Kaldor,
labour). Thus the impression is created and 2000; Organisation for Economic
embedded over time that enterprise (good, Co-operation and Development, 2002).
associated with freedom of self-expression) Alternatively, framing the problem in terms
automatically interfaces with flexibility. Any of political economy, globalisation may be
challenge to the suppression of wage theorised as the outcome of a cumulative
demands (i.e. workers' claim over the trend-line that may be traced back at least
distribution of wealth creation) or reductions three decades, having emerged in three
in long-term human capital investment is distinct phases. Grahl (2002) develops a
branded inflexible (bad, associated with stylised framework to catalogue the
``anti-progressive'' thought). globalisation of the international capital
finance system that surfaces implications for
corporate organisation and employment.
Employers are subjected to pressures
Globalisation and human capital
consistently to change the substance and
investment
process of their relationship with the
From a training and development vantage workforce. An important consequence of the
point, globalisation may be perceived as phased, emergent, nature of globalisation is
leading to convergence in the way that it has encouraged policy makers and
managerial skills are developed, compared commentators alike to downplay the
with the diversity between countries existence of a ``globalisation effect'', Grahl
observed previously (Ramirez and Mabey, argues, leading to a failure to understand its
2003). However, what if globalisation social consequences (see Table I):
requires attention to: ``. . . more than . First phase (1970s): During this period, a
conducting business across national borders world market in currencies developed.
. . . [but also entails] expanding competition The abandonment of controls under what
for almost every type of organisation . . . had been known as the Bretton Woods
presenting management with the challenge of system, that controlled the exchange
[ 463 ]
Stephen J. Perkins value of traded currencies, leaving only must cope with the consequences with
Globalisation and IHRM: ``market controls'' (i.e. no politically reduced capacity to raise the means to do
partners in comparative oriented controls) put national economies so through taxation of the wealthy
perspective?
and their governments under pressure to (corporate finance rentiers are absentees).
Journal of European Industrial
Training reduce inflation. Thus the Debt has been running from governments
27/9 [2003] 461-472 Keynesian-inspired willingness on the to corporate debt markets, with
part of governments to accommodate the consequential effects for equity markets
inflationary consequences of maintaining (the alternative option to debt financing).
``full employment'' was placed under With the increased propensity of
threat, once currencies were being bought industrial enterprises to shift from debt
and sold on the international foreign based financing of growth (bank
exchange markets around the clock. borrowing), where firms are competing
. Second phase (1980s): Early in this period, with governments for access to
public finance globalisation began with investment funds, managements have
the growth of international bond markets tended towards increasing their
for state debt. This development dependency on equity funding. And the
increasingly constrained national-level gathering momentum of ``privatisations''
economic growth policies. Under these world-wide, where instead of being state
conditions, external influence is exerted underwritten large utilities must compete
implicitly on the basis that developed with other trading entities for funds, has
countries are anxious not to lose their exacerbated the situation. The result has
access to state debt financing at preferred been increasingly active trading in
rates, which might be threatened by corporate stocks, with an increasingly
market perceptions of relatively higher dispersed shareholding compared with
risks of capital gains distribution passing previous corporatist arrangements.
to labour (in '``inflationary'' wage levels The sum of these macro economic trends may
and social benefits), rather than to capital be a momentum for transforming the
interests. For the developing world, in perceived governance rationale
these circumstances, ``dependency'' underpinning corporate organisation ± in a
pressures are likely to be even more word, its ``Americanisation''. And
severely experienced. technocratic discourse carries implicit
. Third phase (1990s): Over the past decade pressures to accept ``market logic'' as
or so, the globalisation of public finance self-evident for these developments
has been extended to corporate finance. (McKenna, 2000). Adopting an alternative
While the impact may be an indirect one, perspective, it is tempting to characterise the
a line may be traced linking the current position as an imperialist project. Although
stage of development of financial to imply a premeditated US global economic
globalisation to the earlier phases, take-over would probably be an
enabled by its cumulative effect overstatement, the roots of the ideology that
± free-floating currencies and increasing rationalises ``free-market fundamentalism''
dependency of state legislators and (Hobsbawm, 2000,p. 69), may be identified as
administrators on non-democratically having originally developed in the USA. The
accountable interest groups. Global ``American hegemony'' may be taken as
financial interests may thus be seeking to present as universally applicable a
characterised as no more than ``tourists value set and corporate governance practices
and vagabonds'' (Bauman, 1998). Unlike that emerged under the US's unique temporal
the spatially-bound working populations and spatial circumstances (Hutton, 2002a)[3].
around the world, enabled by technology, Hutton (2002b, p. 26, emphasis added) argues
finance capital exists in the abstract. Its that: ``. . . globalisation has progressed so fast
owners have no interest other than and so thoroughly because it has not been
accumulation. National governments imposed by the US, however. It has developed

Table I
Stylised phases of globalisation
Phase one (1970s) Phase two (1980s) Phase three (1990s)
Post-Bretton Woods development of world currency markets International bond market growth in state Competition for debt between states and
debt (privatised) corporations
Fiscal pressure on states Extraneous influences on ``social Dispersion of corporatist consensus
contract'' framework
Source: after Grahl (2002)

[ 464 ]
Stephen J. Perkins as it has due to a framework of trade treaties, tensions. Multinational companies are
Globalisation and IHRM: international accounting and legal standards encouraged to invest in pre-departure
partners in comparative and a willingness by all players to submit to training for expatriate managers, or at least
perspective?
the judgements of the World Trade to encourage managers to reflect on how they
Journal of European Industrial
Training Organisation or IMF''. may need to adapt their managerial practice
27/9 [2003] 461-472 The present question-marks regarding the (Jackson and Bak, 1998, p. 298). They ``must
ongoing march of globalisation may reflect realise they are guests in the host country
the uncertainties around America's with its own distinctive value system'', such
unilateralism under the Bush that their actions and behaviour [need to be]
administration, which is having a depressing determined more by the host culture than by
effect on the collective judgements of past experience'' (O'Keeffe, 2003, p. 233).
international stock markets. In Hutton's Structure and agency factors may be
words: ``Once a new rule is in place ± that the potentially in tension here.
US can and will do what it wants when it How does this dichotomy measure up
wants ± one of the pillars of globalisation against the more holistic and normative view
falls. We are then moving into a new world in (e.g. Granell, 2000)? What questions should
which the law of the jungle holds, and the organisation leaders be asking faced with the
markets don't like what they see'' (Hutton, competitive pressures for change outlined
2002b). above? Which approach is more likely to
create the conditions for corporate harmony?
What are the potential sources of tension?
Governance and IHRM implications And what effect is the ``dispositional
advantage'' enjoyed by those who control the
Given the competing range of flow of foreign direct investment (FDI) likely
conceptualisations, extending the to have in terms of ensuring control of the
comparison with heuristic intent surfaces a
situation once a particular choice has been
variety of potential interpretations of the
made?
practical consequences of globalisation for The key factor impacting people
corporate regulation and IHRM. Does ``going
management and development
global'' imply harmonisation of HR systems
internationally arising from the corporate
internationally? (IDS, 2000):
finance change dynamic appears to be the
Proponents of the globalisation thesis argue
demand for a unitarist determination of the
that pressures of globalisation have set in
motion a convergence process of employment corporate governing objective, and
relations patterns in MNCs towards the ``flexibilisation'' as the received wisdom
individualistic Anglo-Saxon approach, informing and legitimating approaches to
regardless of MNCs country-of-origin (e.g. managing the employment relationship.
Reich, 1991). Yet, another strand of the debate Re-writing the constitution of corporate
argues that the nation state and different enterprise risks overturning antecedent
models of capitalism continue to be the basis governance models infused with deep social
of economic actors engaged in the world meaning (Grahl, 2002) (see Table II).
economy (e.g. Hirst and Thompson, 1996;
The employment model changes as the
Lane, 1995) (TuÈselmann et al., 2000, p. 27).
governance model shifts from being ``voice''
Normatively, ``a deep analysis of the set of based: premised on reproducing
values, beliefs and behaviour patterns that socio-economic order grounded in a
govern day-to-day organisational bargained contract, underscored by national
performance'' is called for (Granell, 2000, regulation, to being ``exit'' based. Under the
p. 90). Globalisation makes culture ``an latter conditions, finance capital interests
increasingly strategic issue that has to be discipline firms, their management and
faced and properly managed'' (Granell, 2000, workforces, by the potential threat of
p. 90). The implication is that, at the liquidating their shareholding, exposing
organisational level, embedded social firms to hostile takeover bids, or at least loss
institutions, norms and practices can of investment funds to finance growth.
potentially support or inhibit change. Operational indicators in the table above
Training managers to address the illustrate the position. Under the voice-based
opportunity or threat to corporate system, for example, the firm is a vehicle for
governance aims represented by cultural integrating a variety of interest groups (e.g.
diversity becomes a significant empirical customers, employees, finance, suppliers)
issue, therefore. Expatriate managers whereas under an exit based system the firm
deployed to oversee the economic value is strictly designated the property of
extraction from FDI countries may be shareholding ``owners''. These differences are
perceived as facing ``huge demands'' translated into the basis on which the firm's
(O'Keeffe, 2003, p. 233) in managing these activities are monitored. In voice-based
[ 465 ]
Stephen J. Perkins firms, stakeholders participate in day-to-day managerial styles and the orientation of
Globalisation and IHRM: governance; under the exit model, scrutiny is managers themselves when pursuing FDI
partners in comparative restricted to financial performance initiatives. For example, ``Western concepts
perspective?
indicators. The danger inherent in of motivation may have limited relevance in
Journal of European Industrial
Training voice-based governance is that ``group-think'' a socialist China'' (Jackson and Bak, 1998,
27/9 [2003] 461-472 blinds insiders to under-performing assets; p. 283). Here the focus may be less on the
under exit governance, wider stakeholder organisation of enterprise to secure
interests are subordinated to idiosyncratic industrial productivity and thereby return
and short-term speculator behaviour. on private investment. Instead the
Socially embedding corporate stakeholding, orientation may be guided by a perception of
subject to voice-based governance, may act to the business governed by what is best for the
constrain expansion, whereas an exit-based country ± in terms of ideological, political or
system offers more efficient access to specifically social goals (Jackson and Bak,
investment capital. Such benefits are offset 1998). O'Keeffe (2003, p. 233) discusses the
by dilution of ``situated'' control, however. ``divergence of understanding'' between
Voice- or exit-based, the rationality of multinational organisations and local
organisation depends on the perspective communities on the receiving end of FDI.
adopted by the observer. With the cross Whereas for the investor ``superior returns''
border flows of financial investment, there is are the goal, for the host country nationals
evidence that home-based criteria are the orientation towards the enterprise may
abandoned to the common denominator of be characterised in terms of employment
ruthless speculator capitalism. The case of provision, and contribution towards the
BMW in its UK Midlands experiment (Rover economic infrastructure and well-being of
Group) offers a practical example. The most the immediate community.
significant IHRM issue may be the tendency Embedded social institutions, such as
of technocratic discourse ``to remove people co-determination arrangements in parts of
from sentences'' that underle policy mainland Europe, representing the
development (McKenna, 2000, p. 76). In the legitimate means of ordering
Australian Department of Foreign Affairs capital-labour-state relations, act as another
and Trade definition of globalisation cited potential check on homogenising forces
earlier (McKenna, 2000, p. 75), while there is a impacting on the global employment and
reference to humans in the sentence quoted, governance paradigm. There are variations
``it is an economic concept'' (McKenna, 2000, in the manner in which flexible realignment
p. 75). Globalisation is represented ``as an of a consensus-based social contract may be
inevitable outcome of a set of neo-liberal applied to categories of workers. There are
phenomena which are implied in both the groups who enjoy an episodic advantage
premise and conclusion'' (McKenna, 2000, (Edwards, 1986) through their possession of
p. 777).
skills that are in short supply but critical to
the production of surplus value (profits and
dividend streams). These workers may be
G'local structure and agency able to exact a price for cooperation with
interactions employers (frequently administered through
Qualifying Grahl's (2002) stylised elaborate systems and processes). This
globalisation trajectory, caution may be segmented position of advantage remains
prudent before arguing deterministically, provisional, however; ``scientific''
however. There are opportunities for management represents an unending search
interests other than mobile global finance to for new processes associated with further
manoeuvre against the potential sanctions of divisions of labour to enable work to be
the hegemonic regime. MNCs face the specified in ever greater detail as part of the
problem of embedded incompatibilities in profit seeking at minimum cost to capital

Table II
Impact of alternative governance drivers
Voice-based Exit-based
Coalition of interests Property of owners
Scrutiny based on day-to-day owner/managers (inc. banks, etc.) Scrutiny based on financial data
Cronyism risk Speculation risk
Socially embedded (expansion constrained?) Disembedded ± access to market finance, but loss of control to abstract
interests (money abstraction)
Source: after Grahl (2002)

[ 466 ]
Stephen J. Perkins ± the latest variant is ``knowledge employee relations practices ± e.g. team
Globalisation and IHRM: management'' (Hull, 2000). Contingent working, where a convergence may be
partners in comparative employment systems also offer scope to observed between ``Fordism'' and
perspective?
inhibit the accumulation of social capital on ``Toyotism''. Teague (2000) argues that it
Journal of European Industrial
Training the part of groups of high discretion, would be erroneous to suggest that either a
27/9 [2003] 461-472 advantaged workers, by manufacturing blanket US-style employment relations
competition between individuals for zero flexiblisation is occurring; or that the
sum rewards and even ``self-competition'', to restraint of traditional labour market
sacrifice seniority rewards in favour of institutions remains intact in contemporary
non-guaranteed performance pay. The latter Europe. The changes in economic context
development transfers to labour the risk of may thus be releasing tensions for future
ensuring sustained high productivity. For employment relations activity, but the exact
what Castells (2000) terms ``generic labour'', nature of this is as yet unclear.
instead of securing collectively bargained While it is difficult yet to judge likely
premiums, these increasingly peripheral and definitive outcomes, it may be the dynamics
atomised workers are placed in of IHRM are being shaped as much by ``social
solidarity-destroying competition (on an partnership'' logic as by ``shareholder value
international basis, as capital encourages based management'' (Teague, 2000). If social
firms to relocate non-core activities purely partnership is concerned with
on the basis of the cheapest available labour). process-building then, if carefully enacted by
Countries such as the USA, where the managements, it may have a substitution
dynamics of the socio-economic system potential for traditional ``trench warfare'' in
sanction large wage/income differentials, those employment relations systems based
where the governance system was developed on a tradition of ``free collective bargaining''.
(even if it is treaties and trade agreements Equally, it may be replacing the traditional
entered into by a plurality of nations desiring role of the employee representative under
access to capital markets that are the formal co-determination systems. Commentators
means for its diffusion) are more able to such as Guest (1999) argue that the workers'
tolerate flexible employment systems. In verdict on (normative) HRM is a positive one,
non-US advanced industrial countries where where it is being comprehensively applied
the social contract has been evolved to (just 14 per cent of workplaces according to
compress the gap between rich and poor, the UK (WERS 98) data (Cully et al., 1999, p. 291)
flexibilisation imperative may be subject to and similar in the USA (Milkman, 1998, cited
greater organised resistance. It is necessary by Cully et al., 1999, p. 291)). The attraction
to appreciate the macro context in which may come from the opportunity for
micro policies at the firm level are shaped, employees to feel more engaged in complex
influenced by the globalisation of financial problem-solving than Castells' (2000) ``generic
markets, although with no single path along labour''. And the trade unions, with their
which outcomes are determined. The stage of traditional manufacturing industry and
development is a feature of the interpretation public service sector concentrations, and non
of all actors in respect of their material politically correct orientations (``male, pale
advantages ± dispositionally and episodically and stale . . .''), may be less attractive to the
± and the impact of differing ideological new generation of workers in atomised
drives in the direction of the US hegemony. employment (the ubiquitous call centre
Particular attention may be given to workplace may be an important exception) in
developments in employee ``voice'' whose social customs union membership
mechanisms. For Teague (2002), the debate may be absent or at least dormant (Visser,
around European employment relations 2002).
systems has become increasingly complex. Thompson (2003) surfaces the assumption
Comparative perspectives vary between underpinning ``progressive'' HRM
Streeck's (1997) pessimism and other approaches that there will be cohesiveness
commentators' optimism regarding and reciprocity between strategic, functional
European social policy. The emphasis is now and workplace levels in the enterprise. Thus,
on ambiguities. For example, European globalisation optimists may argue that
banks may be interpreted as either managements locally can ameliorate the
continuing their traditional role as sources of effects of the demands on the part of finance
long term corporate finance, in corporatist capital institutions for more flexibility in the
configurations. Or they may be seen as employment relationship through
instrumental in driving through flexibility investments in human capital: ``training,
and wage restraint. Or some combination enhanced careers structures . . . and other
between these extremes may be occurring. incentives to [enable work force members] to
The effects are rooted in developments in share in the fruits of improved performance''
[ 467 ]
Stephen J. Perkins (Thompson, 2003, p. 363). Unfortunately, objectivity suspect, where ``abstract technical
Globalisation and IHRM: Thompson argues, the evidence is that rationality'' is in practice ``interested
partners in comparative rationality''? And what does the partnership
perspective? managements are failing to live up to their
side of this ``high performance'' bargain, discourse, juxtaposed with that of
Journal of European Industrial
Training however. Given an ``exit based'' governance globalisation imply for the representatives of
27/9 [2003] 461-472 orientation: labour and the traditional basis of their
. . . not only are employees being asked to take authority, and resources, and capacity to
over responsibility for careers development, mobilise employees? How fragile are these
studies show that employers are making less developments in new institution building,
investment in training and skill development, and how sensitive to market shocks? What
in part because of fear that such investment
price ``partnership'' and ``human capital''
will be lost through redundancy or exit from
development initiatives in the face of a major
their firm . . . or because multi-employer
networks and outsourcing are not conducive
slump, given the already negative
to either investment in human capital, or consequences of exit based governance for
organizational learning (Thompson, 2003, ``strategic'' training investment?
p. 365).

This argument stands in direct contrast to


The devil in the detail?
the primacy accorded to ``strategic''
investment in training in normative HRM The foregoing questions may usefully be
conceptualisations such as that of Keep explored by reference to recent research
(1992), outlined earlier in the paper. More conducted in The Netherlands. The findings
pragmatically, HRM policy makers may may help to illustrate the negative
focus on identifying institutional barriers to consequences of US style market capital
enacting the strategy desired to serve the allocation ± efficient at the macro economic
corporate governance objective, and then level, but inefficient at the micro level. The
find ways to navigate around these. data also connects with questions arising
Alternatively, it may be decided to moderate from the parallel trends of a drive for greater
the degree of flexibility demanded of local flexibility in employment relations and the
labour, and accept the higher ``entry costs'' to partnership experiments cited above.
operate in particular countries. Depending Kleinknecht (2002) has assembled data to
on the degree of dependency at national assist in evaluating an alleged ``job creation
economy level, it may be the large MNC is miracle'' in The Netherlands in recent years.
able to put state regulators under pressure to The two issues that have been placed in the
lessen the negative impact of institutional foreground have been:
factors, as perceived by foreign direct 1 wage restraint on the part of labour; and
investment (FDI) sources, possibly ushering 2 lexiblisation of labour markets measured
in a two-tier system[4] as a transition to full both externally ± e.g. casualisation of
flexibilisation. Valenzuela (1992) examines contracts ± and internally ± e.g.
state labour strategies of incorporation, at a cross-posting and contingent pay (De
general or ``peak'' level and/or repression of Haan et al., 1994, p. 57, cited by
organised labour to comply with FDI Kleinknecht, 2002).
conditions. In some cases, the sources of Kleinknecht has investigated the question:
capability require acceptance of higher entry ``Does flexibility lead to higher
costs[5]. And there is evidence (Bhopal and performance?'' His conclusion is that there is
Todd, 2000) that some country of origin effect no clear evidence that it does. The reasons
may be perceived in terms of the specific again are a complex amalgam of factors,
application of flexibilisation demands on the explored through testing the following
part of different MNCs. hypotheses:
Notwithstanding reservations about
structural determinism (Grahl, 2002; Teague, H1. Through achieving savings in wages
2002), the evidence considered above suggests costs, employers will tend to hire more
a more deeply textured response is needed people, reducing the scope for
than simply ``integrating differences, putting unemployment (this has traditionally
together our strengths, building from the been the rationale behind comparisons
differences and being able to join efforts for a painting ``inflexible'' European
countries negatively against ``high job
win-win process'' (Granell, 2000), when
creation'' USA); but
considering globalising and HRM tendencies.
The emergent empirical question is: ``Who H2. The increased mobility of labour will
sets the criteria for evaluating `win-win' undermine traditional institutions of
outcomes?'' In epistemological terms, what trust between the parties to the
count as ``rational'' measures? Is the implied employment relationship, reducing
[ 468 ]
Stephen J. Perkins commitment leading to the loss of envision scope for the parties to exercise
Globalisation and IHRM: social capital (``corporate memory'' ± or ``strategic choices'' (Child, 1972) to pool
partners in comparative capabilities and overcome the possible
perspective? cumulative, institutionally embedded,
workforce knowledge); and hence negative effects of diversity. More cautious
Journal of European Industrial
Training perhaps, some other commentators raise
H3. The combined outcome will be
27/9 [2003] 461-472 questions regarding the impact on the
equilibrium in terms of economic
exercise of such choice of asynchronous
performance levels.
material and ideological relations between
The research gathered data to facilitate the various institutional actors. Those
comparative multivariate analysis between cautiously optimistic regarding the
innovative and non-innovative firms, defined consensual nature of globalisation until
as firms with research and development recently, in spite of allegations of an
(R&D) facilities and firms with no R&D American hegemony, now highlight the
facilities. Operational indicators of firm unknown impact on its future trajectory
performance were: wages levels, profit as a arising from potential American
percentage of sales, increases in sales, and unilateralism.
increases in number of employees[6]. The
findings indicated that while lower wage What are the implications for employment
rates may facilitate increases in the number and IHRM?
of employees, firms tend to innovate less Again, the messages are mixed and
(possibly due to a loss of capability to do so), conditional. On the one hand, it may be
retaining ``older vintages'' of products for argued, at the macro level, that the efficient
longer. Raising some important implications manner in which American-style
for training and capability development, this management facilitates the transfer of
``innovation gap'' may be perceived as the corporate finance to productive activity ± now
reason behind a decade of wage moderation extending the system's reach on a global (or
but reduced market share in the eight largest at least triadic) scale ± is a source of job
OECD countries, that together account for 75 creation. In return, the need for flexibility in
per cent of foreign trade world-wide[7]. While the matching of labour resources to
the OECD average level of job mobility is production requirements (internally and
nine per cent of people changing jobs per externally to the enterprise) may be regarded
annum, the figure in The Netherlands is as a reasonable compromise. However,
10 per cent[8]. evidence can be marshalled to illustrate the
potential inefficiencies of the neo-liberal
inspired governance form, when scrutinised
Conclusions through the lens of social capital (trust,
commitment, innovation, and corporate
This paper set out to examine the global memory transfers) over the longer term. The
context for IHRM, in comparative choices for IHRM policy makers and their
perspective with the emphasis on heuristic advisers appear to focus, on the one hand, on
interpretation. finding ways instrumentally to make short
term deals with ``talent'' that is leveraging
What is globalisation? ``episodic advantage'' in the market, while
Conceptual and operational definitions were exploiting cost minimisation opportunities at
considered, with the qualification that there the global periphery. Alternatively,
are numerous approaches commentators and corporate agents may seek to manage the
policy makers seem to adopt, contingent on global dynamic through institution
their (disciplinarily textured) perspective. (re)building, in spite of the countervailing
The tests applied to evaluate the existence pressures of ``dispersed portfolio-style''
and potential extent of global and regional capitalist investment. As a ``third way'', in
trends are similarly varied. An especially place of the apparent dichotomy, some may
interesting proposition is that developments be willing to accept the challenge of
associated with international finance capital attempting to reconcile these tensions
need to be interpreted over a long-run through incorporating the parties to value
trajectory, advancing cumulatively (Grahl, creation in ``social partnership''
2002). initiatives[9]. However, empirical
employment relations evidence to date
What impact is globalisation having on suggests that, at enterprise level, while the
organisations? workforce may be ``empowered'' and
Again, the answer depends on the ``involved'' at the point of production, not
commentator's perspective. Optimists adopt only may such managerial initiatives form
a normative orientation; progressives part of a work intensification programme.
[ 469 ]
Stephen J. Perkins They may also lead to trade union p. 2). In spite of the ideological partnering
Globalisation and IHRM: substitution strategies, muting the collective with HRM, even from a normative
partners in comparative ``voice'', limiting the scope for employees to perspective, caution is advisable before
perspective?
defend their bargained ``gains'' and assuming that globalisation will homogenise
Journal of European Industrial
Training ``privileges'' at a time of economic downturn, approaches to training and development. The
27/9 [2003] 461-472 while removing evn those few locations in managerial goals (motivated by neoliberal
the global political-economy where co- governance principles) may be the same
determination principles have offered labour across enterprises internationally. But, if it
interests legitimate access to strategic is accepted that action is socially
forums. constructed, and hence culturally and
institutionally moulded (Taylor, 2000),
Are globalisation and HRM tendencies empirical researchers may observe
linked in some way? important differences in the course of
The universal HRM mantra of ``commitment, managerial action in designing and
flexibility, quality, and strategic alignment'' executing training and development practice.
(Guest, 1987) may be interpreted as one From a more materialist perspective
indicator of the hegemonic influences of (Thompson, 2003), research might explore
American capitalism. And its diffusion may risks to the sustainability of training and
be perceived as associated with the development investment by MNCs over the
neo-liberal inspired corporate governance longer term. For example, the extent to which
regime. However, a deterministic impulse governance pressures may constrain local
should perhaps be resisted. As with many management discretion in developing human
aspects of the contemporary capital.
political-economy, diverse traditions and The quantity and quality of training
institutional factors appear to drive equally undertaken by MNCs appears to be highly
diverse interpretations on the ground. While influenced by the organisation's ``HRM
any conclusion needs careful qualification at context'' Mabey (2002). This context may be
this stage, an alternative to the notion of derived from exogenous factors (political and
centre-driven homogenisation of IHRM is the regulatory frameworks ± e.g. training levies)
countervailing diversity in experimentation and sectoral level competitive shifts in
with the substance and processes of market practice. Alternatively, endogenous
employment relations regulation, from the factors such as business priorities and/or
various sites of labour ± management structural configuration may act to critically
interaction, a trend that perhaps coincides frame the weight given to training and
with what Katz and Darbishire (2000) have development. The sophistication of the firm's
termed ``converging divergences''. career and succession planning, and the
formal and informal influence of the HR
What are the lessons for trans-national function through control of design and
industrial training? delivery of management development
The IHRM literature indicates growing episodes, represent key factors in the degree
recognition that investment in of prominence management development
developmental training can positively achieves within organisations (Mabey, 2002).
influence managerial performance outcomes, Shortcomings of the functionalist perspective
from an institutional perspective. Legitimacy on management development may be
for the international training agenda may, in subjected to critical scrutiny. First, in terms
part, be derived from the contribution of the narrow vocationalist path, informed by
workforce development policies may make to a unitarist perspective, of developing generic
enlightened managerial behaviours that competencies required by the firm in
acknowledge a plurality of norms and response to ``skills deficiencies'', which
traditions associated with value creating overlooks the wider capabilities of a moral,
endeavour. However, the different social, political and ideological nature
orientations between countries towards implicit in the manager's role (Mabey, 2002).
training and development ``represent more The orientation of training and development,
than deviations from a 'best practice' in common with other HRM policy and
trajectory'' (Ramirez and Mabey, 2003, p. 2). practice, may be viewed as not value free
Despite the growing global integration of (even if so presented), but privileging and
production and ownership structures, masking an agenda derived from a
``different industrial infrastructures and sets hegemonic corporate governance ethos.
of interlocking institutions [exist] that shape Second, and linked to the first aspect, such
the paths firms take towards both skill competencies may be deployed under
formation and the types of product markets conditions of asynchronous power relations
they compete in'' (Ramirez and Mabey, 2003, ± current managers may be assessed against
[ 470 ]
Stephen J. Perkins the new ``core competencies'' and their future perspective on political-economy (Ackers,
Globalisation and IHRM: employment prospects judged accordingly. 2002).
partners in comparative Again, the temptation of becoming overly
perspective?
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Yochanan Altman, Mhinder ownership and employee relations: German
Bhopal, and the editor of McKenna, B. (2000), ``Labour responses to
this journal for helpful globalization: the Australian experience'', multinationals in the UK'', Personnel Review,
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