The Three Distinct Faces Of Hrm Management Essay

Published Date: 23 Mar 2015

Few things today are the subject of as much debate as globalization. However, globalization itself is not a recent invention for it has existed since antiquity. Throughout

human history, people have expanded their horizons to do trade, gain control over land and other precious resources and subjugated others in a quest for power, wealth and glory. Alexander the Great was a famed empire builder who ruled over large swaths of Europe, Northern Africa and even India. The Romans went even further by conquering virtually the whole of Europe including Britain and much of Africa, fuelled by a desire to obtain precious metal, agricultural products and slaves. When the Western Roman Empire collapsed in476AD, the Byzantine Empire became the major power in the Mediterranean, the Middle East and Northern Africa. This empire lasted for over a thousand years until it was defeated by the Ottoman Turks in 1453. Subsequently, the British became the last great Imperial power. At its height, the British Empire spanned one quarter of the total global land mass, thus earning the title of, "The Empire on which the sun never sets", although the sun did set on the empire after the Second World War.

Globalization can be defined as the integration of economies via trade and the flow of investments and the creation of products and services, all of which serve to promote global competitiveness. Otherwise, globalization can be described as promoting the integration of international markets that are not confined to national boundaries. In particular, globalization has given rise to multinational corporations with a global outreach. All facets of manufacturing, sales and marketing, consumption, tastes and preference have been altered by globalization, as is the dramatic rise in the level of trade among businesses that give rise to specialization in particular areas. Globalization has promoted efficiency in the manufacturing process and the shift of manufacturing activities to low skilled, labour intensive nations. On the other hand we have witnesses the shift of highly skilled and educated workers to more developed countries that have moved up the knowledge based economy value chain. Large scale production has moved from achieving economies of scale to creating economies of scope, particularly in high income nations. The manufacturing cycle has been greatly reduced by focusing more on higher product quality, innovation and niche marketing. In addition, external financial and related services are incorporated into the manufacturing cycle. Globalization is exemplified by the harnessing of the best facets of pluralism and multiculturalism to create a dynamic workplace. More emphasis is placed on activities that are knowledge intense and this is particularly obvious in developed countries.

With the rise of globalization came the proliferation of the multinational corporation which is a business that is headquartered in one country but has operations in other countries. An integral part of a multinational corporation is a diverse workforce and it becomes a major challenge to manage workplace diversity in a business that spans the globe. Similarly, individuals are no longer confined to work in the country of their birth but can become global citizens whose workplace knows no national borders. Hence, HRM has to deal with numerous challenges when dealing with workplace diversity. These issues are discussed in this report along with how a three-role model for strategic HRM can play in order to manage human resources.

2.0. THREE FACES OF HRM

Based on extensive research, it has been found that there are three distinct faces of HRM. They are building HRM, realigning HRM and steering HRM. Indeed these three faces can be regarded as stages in building HRM for an increasingly complex organization.

Central to the faces of HRM is the concept of fit. According to the systems theory, nothing is correct unless it fits with the other elements within a system. The fit theory incorporates other elements such as consistency, coherence, matching and contingency. Over the years, researchers have differentiated two types of fit. The first is called internal fit, which emphasizes on the elements within the organization. The second is referred to as external fit as it focuses on factors outside the organization. In all three faces of HRM, we see how fit plays a role in shaping each and every one of them. Let us now examine these faces one by one.

2.1. Building HRM

The first face, building HRM is regarded as the foundation face in which the essentials of human resource management are put in place in an organization. All organizations whether big or small face the same basic problems of recruitment and selection, training and development, career management, performance management, reward management and labour and industrial relations. Building HRM focuses on internal fit.

First of all, organizations have to determine how many employees they need to perform the respective tasks needed to make the organization function. New staff have to be recruited and the recruitment process must be decided on. For multinational corporations, the issue of international transfers also has to be considered. An employee who is hired in one country may be asked to work in another country and there are special recruitment processes for this purpose. In addition, HRM also has to deal with termination and sometimes outplacement of employees. Termination occurs when the employee's performance is unsatisfactory and all avenues at rehabilitation have been exhausted. On the other hand, if the economic environment is bad, businesses may be forced to terminate employees to cut back on operating expenses when there is declining sales. In any one of these situations, termination must be handled properly to avoid potential lawsuits.

Once people are hired, they sometimes need to undergo training in order to be able to perform their jobs. For instance, employees may need to master new computer software or machine operating procedures. It is also vital for employees to undergo periodic training especially when working conditions have altered so dramatically that they warrant the mastery of new skills. Often, companies fail to provide adequate training once employees are on the job and this could eventually lead to job dissatisfaction. Training is also needed to groom leaders of the organization.

Another important facet of building HRM is career management. A good company provides a clear career pathway for each and every employee so that they can achieve success and personal fulfillment. HRM needs to provide clear career planning so that employees can see themselves having a long term future in the company. Otherwise, they may get disenchanted and switch to other jobs with better prospects. Coaching and mentoring is also needed to help employees master certain skills in a hands-on manner. Succession management should also be done in a systematic and timely manner so that future leaders are identified early and groomed to assume leadership positions. All too often, organizations neglect this function and end up failing when a good leader retires and a suitable successor is not found and trained to assume the mantle.

One of the key features of HRM is to evaluate the performance of employees for rewards or punishment. Performance management is done through motivating employees. Job evaluations are done to see if the employee performs what is stated in the job description. At the inception, goals and standards need to be set so that performance can be benchmarked against them. Similarly, organizations need to have clear Key Performance Indicators (KPIs) for all employees so that they know what is expected of them and can measure their own performance. In addition, companies need to have proper performance appraisal methods that are open, unbiased and whose outcome is accepted by all parties.

Next, establishing HRM in an organization necessitates a good rewards management program. Employees must be adequately compensated and accorded certain benefits. A good organization has a remuneration package that is equal to or above industry norms. In addition to basic pay, a business can have an array of financial and non-financial incentives to its employees. Financial rewards range from overtime pay to year end bonuses or gifts. On the other hand, non-financial rewards can be in many forms and are limited only by the creativity of the company. For instance, it can be in the form of a letter of appreciation, flexi-work hours or the use of the company club membership. All these rewards and incentive programs need to be designed in a way that is effective and not overtly expensive.

In order to succeed, building HRM needs consistency. There are three types of consistency. The first is called single employee consistency and this refers to the perception employees have with regard to their various interactions with human resource functions such as recruitment and motivation. If employees perceive these functions as being inconsistent and poor, then the overall HRM strategy will fail. The second type of consistency is consistency among employees and it refers to the perception of fairness among employees who perform the same function but in different departments, and this is of great significance in multinational corporations. The third type of consistency is called temporal consistency and it refers to consistency over time. Policies that work well are consistent over time and those that fail are constantly changing.

There are two versions of building the HRM model. The first is called the universalist approach. According to this approach, there is one-best-way of managing and organizing employees as can be seen in best practices in functions such as recruitment, appraisal, selection and compensation. The danger of adopting this approach is that it fails to examine the context in which HR policies are formulated and implemented. Hence, when companies who adopt this approach take their business abroad, they assume that these best practices can be duplicated with an equal measure of success in other countries. Similarly, some businesses think they can duplicate the success of a successful industry leader by replicating exactly what it does. While this is obviously a naïve and simplistic approach, many organizations embrace it with gusto, only to find disappointing results.

The second approach to building the HRM model is called the relativist approach. This method recognizes the importance of context and that there is no real right or wrong approach but a company must adopt what is most appropriate for it and it alone. Indeed this approach is favoured by many European scholars who pour scorn at the universalist approach.

In recent year, there has emerged another approach that is seen as the middle ground of the two diametrically opposed approaches mentioned above. This is called the "high performance" approach. According to the proponents of this approach, even though there is no single best way of doing things, there are some basic features that are termed high performance work systems (HPWS). These are characterized by very selective processes of employing new staff, skills development, teamwork and training.

When placed in an international context, it becomes clearly that the universalist approach is unsuited. Virtually all aspects or HRM rely on context. For example, the number of working hours, the existence of minimum wage, the powers held by labour unions, labour laws and a bewildering array of variables make it virtually impossible to adopt a universalist approach will any real measure of success.

The problem of being a builder is that very often the role can be transformed to that of custodian. After years of putting policies and procedures in place, organizational HRM can become rigid and inflexible. It is true that there needs to be consistency. However, this does not mean that it must be at the expense of keeping up with the times. A company can stay true to itself while reinventing its operations, but a custodian approach verges on the dogmatic. Change is viewed as dangerous and any attempts at updating the firm are shot down. Custodians tend to think of themselves as 'keepers of the flame' and need to conform to tried and tested tradition even if it may be impractical and untenable to meet with current needs.

2.2. Realigning HRM

The second face of HRM is realignment. This is done to meet the needs of a constantly evolving environment. This occurs when changes in the marketplace, shifting competition or the adoption of new technology necessitates the realignment of a firm's HRM functions. Normally, this is done through a change partner. Change partners are normally line management and HR professionals. In realigning HRM, the focus is on strategic change and the emphasis is on external fit.

When realigning a firm's HRM, five factors need to be considered. The first is the organization's strategy. This refers to the firm's key strategic goals in terms of the sales growth, market share and profitability it wants to achieve as well as how to achieve competitive advantage. The second factor is the external institutional environment which consists of the external political, social and legal frameworks. The third factor that needs to be considered is the workforce. The firm needs to examine changing demographics, for instance an aging population, more women entering the workforce, the influx of ethnic minorities and the need to maintain cultural diversity. Next, alignment of HRM needs to examine the organization's culture. These include factors such as the perception of work among staff, the level of formality shown between employees and the willingness to work together. The final factor that influences alignment of HRM is the technology and work organization. This refers to the extent technology has affected the workplace and workers and the skills needed by employees to harness new technology.

Therefore, it is crucial for HRM to be linked to business strategy. There are a few levels of linkage. At the lowest level, HR and other departments are left to evaluate the implications of strategic decisions once they are made and play no role in the decision making process. This is called interpretation. On a higher level, called inspection, the business plan that is drafted is sent to HR and other departments before it is given the green light. The third stage is called insertion, in which the HR department is permitted to provide some input. The final level is integration of the HR department with the strategic management of a firm. Based on research, it seems that we are a very long way from achieving full integration.

If trying to achieve alignment is one problem, managing it is another. It is not easy to realign a multinational corporation and it is a process that could take many years of incremental refinement. There are many reasons why it is so problematic to manage alignment. One reason is that the goals are unclear and confusing, or that the goals are wrong for the company. Sometimes, change may be met with hostility from employees who cannot comprehend why they must change the status quo, or shareholders who do not want to have greater risks for their investments. It needs commitment to manage resistance to change and often, management backs down at the crucial juncture or there may be poor follow up to initial attempts at change.

According to Gratton, realignment is a six step process. Step one entails building a guiding coalition. This means that there must be a strong and committed team of main stakeholders to lead the change process. Step two involves imagining the future. Leaders must be able to articulate a clear vision for the organization. Often, change fails because the vision is wrong and this is a major challenge. Step three requires the firm to understand the gap with current capabilities. This means finding out what is lacking and what is needed to fill the gaps. Step four is creating a meaningful map of the change systems that promotes understanding and facilitates interrelationships. Step five requires building commitment to change. The firm needs to find out the level and the reasons for resistance to change and steer towards assuaging the fears and concerns of the affected parties. This will help lower their resistance to change. Step six is bridging into action the change strategy. Action plans need to be formulated and implemented. By applying these six steps, the process of aligning HRM will be easier and more effective.

As mentioned earlier, managing change in a multinational corporation is a very daunting and time consuming process. For example, if a company takes over another firm in a different country, then the acquired company needs to be aligned with the goals and strategies of the parent company. In the past, the parent company would send expatriates to the foreign subsidiaries to align employees to fit the mold of the parent company. Therefore, foreign subsidiaries are gradually realigned towards the parent company. However, this approach is fraught with problems such as the nee to attract and retain talented domestic managers.

A fixation on change is as dangerous as a tendency to develop a custodial role. This may happen if there is an obsession with achieving quick solutions to major problems. Managers may be too preoccupied to achieve solutions within a tight deadline to the extent that they fail to see the big picture and address the systemic flaws. As a result, the problem persists and the board of directors may elect a new management team to overcome these problems. They in turn, repeat the same mistakes and make new ones and are subsequently replaced and the vicious cycle is repeated to the detriment of the firm. Similarly, fixation of change may develop when new leaders take charge. Often, these people feel the need to leave their mark on the company and dispense with perfectly good policies in favour of their own, which may not be as good. As a result, there is constant, meaningless change every time there is a new leader and this is bad for the organization.

It is said that change is the only constant in life and some leaders have taken it to heart. Therefore, they are restless and relentlessly pursue change, whether it is for better or worse. There is an old American saying that, "If it ain't broke, don't fix it". Policies and procedures that work well must be continued, but some leaders feel the need to tweak with them, all for the sake of making change. As a result, there is a tremendous amount of change going in the modern workplace and this situation is likely to continue in the foreseeable future.

2.3. Steering with HRM

The third face of HRM is called steering via HRM. According to this approach, strategic and HR factors are inseparable and intertwined. This entails managing many contradictory goals such as the need to balance short and long term objectives, becoming a global firm with a local touch, and the need to change and yet remain the same for what is dubbed the transnational firm. This third role of HRM is called the navigator and has a duality or paradox function, which is to balance the internal and external fit.

The concept of duality may be new to Western businesses, but it has been a part of Eastern religion and culture since antiquity. Fit theory is claimed to be unsuited for the modern business as it is too static and relies too excessively on an 'either or' situation. At the heart of the concept of duality in business is the need to manage tension. For instance, there is tension to balance being autocratic (which saves time) and building consensus (which is more time consuming), or there is tension between managing short term profitability at the expense of long term investment.

Each organization is confronted with numerous dualities. They include satisfying the customers'needs while at the same time being ahead of customers, achieving differentiation while maintaining integration, being a low cost but high value added firm, taking risks but avoiding failure, having a loose but tight organizational structure, assigning individual accountability but promoting team responsibility and being opportunistic but planning everything to the last detail. These are some of the bewildering and contradictory goals a company is faced with.

These constant shifts in duality are often described as the swinging of a pendulum. Depending on circumstances, the pendulum may shift from centralization to decentralization and back to centralization. This may not occur during the lifetime of an employee but perhaps within the duration of a job. Here, the limitations of fit are obvious. The concept of fit may be considered a 'snapshot' as it is accurate and applicable for a particular point in time. However, in the long term, duality makes more sense.

Comprehending duality is essential for good transnational management as the hallmark of a transnational firm is the ability to steer between the contradictions it confronts. Let us examine duality in the context of centralization-decentralization. Many firms now adopt decentralization. Its many benefits include being more in touch with customers, endowing employees with greater accountability, greater innovation and improved staff morale. On the flipside, decentralization may eventually become disadvantageous and lead to problems like duplication of functions and slowness in dealing with change. Therefore, a firm's short term goal may be to promote decentralization, but in the long term it may revert to centralization.

A problem that is unique to transnational organizations is the "failure of success". When a company becomes very successful, there is greater tendency to become complacent and rest on one's own laurels. As a result, change will only occur through some great crisis. This is evident in the automobile industry. For too long, American carmakers were complacent to innovate and continued churning out bulky vehicles with high fuel consumption. The economic crisis eventually decimated much of the industry and forced survivors to reinvent themselves to survive. Later, Japanese carmakers assumed the helm once held by American carmakers, but complacency led to serious flaws in the manufacturing process that led to a series of embarrassing recalls. It is yet to be seen if the Japanese car industry will be able to regain its former glory.

The cautionary tale here illustrates an important issue. In order to prevent this from happening, firms need to leverage on their existing resources to remain profitable now while developing new resources that will generate future profits. In the short term, firms need to develop ways to minimize costs, and to promote efficiency to improve the bottom line. In the long run, firms need to innovate, take more risks and experiment in order to attain success. Indeed, the leveraging strategy has helped firms grow internationally.

Indeed, an ability to understand and harness the best of duality seems to be a key feature of organizational longevity. Longitudinal studies have demonstrated that firms that are able to cope effectively with these contradictory and seemingly irreconcilable goals tend to succeed in the long run. This is in contrast to firms that adopt a fit strategy in which they attain great success in the short term, but fail in the long run. Therefore, it seems that great leaders are not that essential to build a successful company in the long run. True, there must be visionary leadership, but this must be tempered with continuity and the ability to adopt a duality approach.

Now, let us compare how the faces of HRM apply in three different countries. The countries selected for this study are China, Germany and Saudi Arabia. They were chosen on the basis of their difference to one another which makes for an interesting case study.

3.0. COUNTRY ANALYSIS

3.1. CHINA

3.1.1. Chinese Culture

Chinese business culture is a curious amalgamation of philosophy, social psychology and strategic Chinese thinking from Chinese folklore literature (Ghauri & Fung, 2005). It can be classified into three major areas namely, the People's Republic of China condition, Confucianism and Chinese stratagems.

The People's Republic of China condition is referred to as guoqing in Chinese and refers to a set of contemporary social and institutional forces that have been driving the Republic since its founding in 1949. There are eight variables in this dimension (Ghauri & Fung, 2003) which are politics, economic planning, legal framework, technology, population, backwardness, rapid change and the Chinese bureaucracy.

The Communist Party has been ruling the country since 1949 and has a firm grip on all aspects of daily life including business. Therefore, major businesses are all linked to the ruling Party elite and no business can really succeed without the party's blessings. Reforms made since the 1970s have brought about drastic and profound changes to Chinese society and some find it hard to cope, especially rural folk. The Chinese bureaucracy also plays a part in business culture. This is through massive red tape and quick buying. It also explains the indecisiveness of decision makers who do not wish to be accountable for mistakes. They adhere to the Chinese dictum that "He who does nothing makes no mistakes" (Buttery & Leung, 1998).

Confucianism is the driving force behind the thinking and ideology of the average Chinese. It is a philosophy that has wide ranging effects. Six aspects of Confucianism are relevant to Chinese business. They are moral cultivation, the importance of interpersonal relationships, family and group orientation, respect for age and hierarchy, the avoidance of conflict and finally, the need to save 'face'. .

If Confucianism represents the idealistic and noble side of conducting business, Chinese stratagems represent the more devious and unsavoury aspects of Chinese business strategies. The concept of stratagem or ji first appeared in the famous military treatise "The Art of War" by Sun Tzu (Sun Tzu, 1982). This is the fount of all the secrets, mysteries and myths about Chinese business strategies. Ji is neutral term in Chinese that can have both positive and negative associations, depending on the context. Ji is defined as a set of human wisdom or a carefully devised scheme with which to deal with various kinds of situations and gain material and psychological advantage over the opponent. Sun Tze describes various stratagems, but the most important is to "subdue the enemy without fighting".

3.1.2. Chinese HRM Strategy

For the past 30 years, China experienced unprecedented economic growth by becoming 'the factory of the world'. Many Western businesses flocked to China for its cheap production costs and this has enabled the country to enjoy an influx of FDI. At the same time, its economy has grown in part thanks to its cheap export. In recent, China has reversed the trend by setting up subsidiaries in foreign countries. This is most notable in America, which has long been a customer of Chinese export.

As a result of more and more Chinese MNCs, we are now able to see how their HRM strategy works. It appears that Chinese HRM strategy is a combination of the three faces of HRM. The presence of Chinese companies in America for instance is due to internal and external factors. Chinese businesses feel it is time to flex their economic muscles. They are drawn to America for the high quality of labour which is best suited for high quality products such as Haier (electronic goods), Yuncheng (labels) and Tianjain Pipe.

As a result, Chinese HRM fills the role of builder as all the basic needs of HRM are put in place based on the requirements such as staffing needs. Line managers have to conform to the formal chain of command and are given little room for autonomous decision making. At the same time, Chinese HRM is also a change partner. This is because Chinese companies have to incorporate American requirements in their foreign subsidiary. For instance, Chinese labour laws and worker unions are virtually non-existent but in America, Chinese companies are confronted with the concept of minimum wage, fixed working hours and strong labour unions. This requires them to adopt an external fit. Since most Chinese MNCs are in their infancy, only time will tell if they reach the final face which is steering via HRM. However, there are signs that Chinese companies are beginning to adopt the transnational approach as they seek to harness the best of Chinese and foreign talent.

3.2. GERMANY

3.2.1 German Culture

The country we call Germany only came into existence in 1871 when a federation of previously small kingdoms came together under the German Kaiser. Since unification, Germany has had a brilliant and dark history. From the start, Germany established itself as an economic powerhouse but its pivotal involvement in the two World Wars led the country to be split and only reunified in 1989. Such a trouble history has deeply affected the national psyche and the German writer Thomas Mann once remarked, "The German does not think politically, but romantically, tragically, heroically".

The Germans are very strict and well-organized. This may be partly attributed to their religion. Most Germans are Protestants and the religion emphasizes on hard work and frugality. Similarly, German culture is largely influenced by the Prussian culture, which places importance on rigorous planning and strict adherence to rules and regulations.

As a result, Germans prize clear thinking and good organization skills. This is seen clearly in the country where everything is neat, tidy and orderly. Trains are never late and the people demonstrate a very high level of civic consciousness. Germans believe in a clear distinction between social and work life and that there is a time for everything. Unlike Malaysians who have a tendency to work overtime to show how hardworking they are, the Germans believe only an incompetent person has to work overtime. Germany is also highly bureaucratic and procedural.

The Germans are a very reserved people. Greetings are very formal and require the correct salutations. There is no need to establish a personal relationship with business contacts as they are more interested in your qualifications and ability rather than how good a friend you are. Protocol must be followed and appointments need to be made a few weeks in advance. Businesspeople are required to dress formally and conservatively and ostentatious accessories are frowned upon. During business negotiations, they tend to be very direct and can be blunt at times. Punctuality is of the utmost importance and any form of delay is perceived as rudeness. Meetings also follow strictly the starting and ending times.

3.2.2. German HRM Strategy

Germany has long been in the forefront of cutting edge technology in engineering, medicine and the sciences. Over the years, it has set up many notable multinational corporations such as Siemens, BMW, and Bayer.

In the early years, German HRM strategy conformed to the building HRM face. German technology and know-how was seen as superior to all others and this tended to cloud how HRM functioned. Indeed, managers of foreign subsidiaries were expected to speak German and branches were run like in Germany. Line managers had to operate exactly according to their handbooks and decision making was made in Germany. However, it was later found that this approach was too rigid and German firms, like many other European firms began to embrace the role of the change partner. German companies began adjusting to the environment and changed strategy implementation. This was met with some degree of success. As the world moves into the new global economy, German multinational corporations are beginning to employ the last face of HRM strategy. Line managers are now given greater freedom They realize the need to manage contradictory goals and value diversity as an asset rather than a weakness.

3.3. SAUDI ARABIA

3.3.1. Saudi Arabian Culture

Saudi Arabia was formerly a province in the Ottoman Empire and was founded by King al Saud in 1932. Originally a very poor country, it became extremely wealthy with the discovery of oil. Saudi Arabia is a major center of Islam as the two holy cities of Mecca and Medina are located there.

Like other cultures, Arabian culture is largely influenced by religion which is Islam. Therefore, those unaccustomed to the Islamic religion and customs will experience some form of culture shock. For example, people in that region are deeply pious. They dress conservatively in keeping with their religious obligations. Women typically wear headscarves and are usually accompanied by a male relative wherever they go.

Businesses are done in strict accordance with Islamic principles which means that there is no interest charged and Arabian business structures tend to be somewhat different from Western businesses. As Islam dictates that the faithful must pray five times a day, business is done to accommodate prayer times. Business meetings may stop abruptly and stores may close during prayer time and the foreigner is well advised to respect these cultural differences.

Arabian business culture is more relaxed than in other regions. Business associates may set an elusive date and time which is sometimes misconstrued as a lack of interest, but in reality, the Arabs are very keen businesspeople and have been successful traders for centuries.

Business meetings usually take place in the afternoon which is seen as a more conducive period and meetings can stretch on for hours without any conclusive answer. It may take a series of discussions for a deal to go through as the Arabs are very meticulous and painstaking in their decision making. Business contacts must be told in advance about an appointment so that they can make the necessary preparations.

Like most Eastern cultures, the concept of 'face' is very important in Arabia. People do not want to offend others and speak delicately over matters. It is very important not to be rude and brash. Even when the other person is wrong, care is taken so that they do not lose 'face'.

3.3.2. Saudi HRM Strategy

There are few major multinational corporations of Saudi origin. However, Saudis have extensive investments in foreign companies and own major stakes in businesses corporations in America and Europe. Many major corporations are family owned, including by members of the royal family. While Saudis may have the controlling stake, they have ensured that the firms they acquire retain their original culture and features. Thus, we do not witness an "arabization" of Western businesses which maintain their national identities. Hence, Saudis practice steering via HRM as they are more concerned with the duality.

The contradiction stems from the difference in Arab culture and Western culture. For example, in Islam, interest in banks is forbidden. Yet, Arabs who own controlling stakes in Western banks do not prohibit interest payment. Similarly, they do not impose Arab business culture on to Westerners. This approach has paid off as the investments continue to bring in much revenue for Arabs.

CONCLUSION

Based on this discussion, one can infer that HRM strategy and globalization are concepts that are symbiotic in nature, when placed in the context of multinational organizations. A firm must formulate strategies that allow it to jump on the globalization bandwagon, strategies that endow it with the ability to better cope with the challenges and problems that it faces. Also, the economic environment has changed in countries touched by globalization, resulting in a greater interdependence and linkage among countries. This is a trend that is anticipated to continue and intensify well into the new century. It is believed that all these are healthy for a global company as it will help it to design a more effective and competent HRM system.

The three faces of HRM strategy demonstrate the evolution from a simplistic approach to one that is all encompassing. Multinational corporations all start out as builders but some move on to become change agents while fewer still become navigators. They have to understand the importance of integrating HRM into the corporate strategy so that they can best utilize their workforce. Managers should also be aware of these developments so that they can make the most out of their experiences working outside their home country.