Globalization may change the nature and behavior of companies that Essay

Globalization may change the nature and behavior of companies that engage in large-scale international coordination, which in tu - Essay Example Offshoring is the process of establishing business units in overseas countries. It helps companies to exploit the natural resources and cheap labour available in other countries. For example, global organizations are currently competing each other for establishing business units in China and India like cheap labour oriented countries. It should be noted that cost cutting is necessary for international companies to stay competitive in international market. Since American and European countries are facing severe manpower shortage, companies in these countries forced to establish business units or manufacturing units in cheap labour oriented countries. Pepsi, Microsoft, Apple Inc. Dell, Sony, Samsung etc are some of the prominent organizations which have already established manufacturing or business units in China. It is impossible for an American company to use only American workforce in their business units in China. Same way, it is impossible for a Chinese company to operate successf ully in India or Europe with the help of Chinese workforce alone. Since locals have better knowledge about domestic market, it is necessary for international companies to employ locals so that the company can exploit the market potentials well. Even though offshoring business helps companies to increase their competitive power, it brings certain challenges also. Management of diverse workforce is one of the prominent challenges facing by international companies while operating cross culturally. This paper analyses the HR policy changes that brought by globalization in the nature and behaviour of companies that engage in large-scale international coordination. 2.0 Globalization and cross cultural business Outsourcing and offshoring are some of the revolutionary business strategies introduced by globalization. As part of outsourcing and offshoring, business travels from one country to another country. In other words, cross cultural business is increasing day by day because of globaliz ation. It would be difficult for international companies to limit their attention in one country alone, when many other countries offer huge opportunities. Majority of the international companies are already saturated in their domestic soil and they need opportunities in overseas market to grow further. For example, Starbucks is an American company which has coffee shops virtually in every corner of America. In other words, it would be almost impossible for Starbucks to formulate its expansion strategies based on opportunities in America alone. Globalization has offered many opportunities to Starbucks like companies in overseas countries. In fact countries are currently competing each other, in attracting foreign direct investments. In short, the global climate for international business is extremely good at present and no major companies can stay away from the opportunities offered by other countries. According to Ivancevich (2006, p.5), â€Å"human resource management is action o riented, people oriented, globally oriented and future oriented†. It is necessary for international organizations to integrate HRM issues into their strategic plans (Beardwell, & Claydon, 2007). It would be impossible for modern organizations to work with a single cultural workforce in a heavily globalized business world.