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The Changing Role of Human Resource Management in the Global Competitive Environment

by Lalla Scotter, studioD

Large companies have taken advantage of advances in communications technologies and increasingly free movement of products and people to create vast, global operations. They employ staff and sell to customers all over the world, 24 hours a day, seven days a week. Human resource departments, once responsible only for recruitment and the occasional disciplinary problem, now have important strategic functions in looking after thousands of employees globally.


Every country has established its own labor and employment laws. While broadly similar in spirit, they can vary enormously in areas such as working time, paid holidays, disciplinary procedures and contracts. The HR department of a global company has an expanded role to have a clear handle on employment law in each country in which it operates. Very often this is achieved by establishing local HR departments in each country. These report to a corporate HR department in the main office.

Pay and Benefits

One of the most difficult HR jobs in a global organization is setting rates of pay and benefit packages. If you are acting as a single organization, you will want rates of pay to be equivalent and fair in every country. However, this does not mean that they have to be the same. A salary of $50,000 buys very different lifestyles in the USA and Albania, for example. In addition, different taxation approaches to benefits such as company cars, pensions and life assurance mean that packages may be more expensive or more difficult to set up in some countries. Both making these decisions and communicating them are new tasks for HR in the global environment.


Global companies aim to be able to recruit the best people from all over the world and employ them where their talents will be of most use. However, there are challenges to this, as a single recruitment strategy will not often work around the globe. Companies also have to deal with different educational systems and differing expectations amongst international executives. They are often in competition with other global companies for the best talent.

Cultural Differences

Typical HR responsibilities such as employee satisfaction surveys and management development become more complex in a global environment as cultural differences can have a major impact. The relationship between manager and employee, for example, can differ. In Asian countries management is typically paternal, while in Western countries employees expect to be able to challenge the manager and have autonomy. While US and UK employees can be forthright in staff attitudinal surveys, those coming from different cultures are more circumspect. The HR department must be able to interpret responses correctly from all cultures.

About the Author

Lalla Scotter has been writing professionally since 1988, covering topics ranging from leadership to agriculture. Her work has appeared in publications such as the "Financial Times" and "Oxford Today." Scotter holds an honors Bachelor of Arts in English from the University of Bristol.

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