Abstract
The major purpose of this study was to evaluate the Effect of Globalization and Information Communication Technologies (ICTs) on Human Resources Management Practice in Nigerian Organizations. Three research questions and three hypotheses were formulated to guide the study. This study utilizes the survey method of research designs. Data for the study were collected from the human resource departments of fifteen multinational and large organizations operating within Enugu and its suburb. The data were analysed using descriptive and inferential statistics. Chi-squaret was used to test the hypotheses at 0.05 level of significance. The major finding of the study on the positive side was that Globalization and ICTs brings about wider sources of skilled labour, lead to job creation, attracts foreign jobs, gives access to global culture, to potentially large applicant pool, attracts people who have skills, knowledge, and ability needed to achieve goals and encourages global outsourcing and so many other points in the study. On the negative side, Globalization and ICTs bring about downsizing which has adverse effects on individuals and on the economy and this is one of the ills of globalization on developing nations, as it increases the level of poverty. Issues like retrenchments or downsizing has a number of counter effects not just on the immediate job holder and family but also on others that make up the economic system. There are some others mentioned in the study. Also, there are so many Information Communication Technologies used in the human resource
management like payroll module, the work time module, the benefits administration module, the human resources management module, the internet, Talent Management systems, the training module, the Employee Self-Service module, application software like ‘Solomon 4’ and other custom made computer programmes. It was concluded that the Globalization and Information Communication Technologies (ICTs) have positive effect on Human Resources Management Practice in Nigerian Organizations. It was recommended that organizations should embrace globalization and ICTs as it encourages efficiency and effectiveness in the operation of an organization. Organizations should use information communication technology to enhance human resource management practice by automating existing work practices, maintaining paperless office, providing a time and attendance system which can reduce errors in enforcement of an organization’s attendance policies, providing an automated inventory system which can help reduce internal theft and keep track of assets used by employees, and providing a data bank which is a repository of information on one or more subjects that is organized in a way that facilitates local or remote information retrieval.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Organizations are changing in the direction of global changes. In view of these changes, it is important to alien human resource programs with the business strategy. This implies that as organizations are changing human resource policies and programs must adapt to the changes as well. One of the major challenges facing businesses today is the increasing globalization of the world economy and competition. There is nothing an organization does that is not directly affected by developments around the world. Nowadays there is explosive growth in foreign direct investment (FDI). Foreign direct investment involves the control of a company through its
ownership by foreign company or foreign individuals. Another trend is the creations of offshore professional and operations centres, regardless of where the final work product is ultimately marketed. Traditionally, business facilities were strategically located in order to be close to suppliers or customers, and/or within trade borders. However, in our present globalized and information and communications technologies world, the use of private satellite links, e-mail, fax machines, and the World Wide Web has made workers from all over the world very accessible.
Global recruitment and staffing are now the trend. Technology now makes it possible for work opportunity to move offshore where labour costs are lesser. Why are so many organizations today under pressure to expand their business interests beyond their national boundaries? Major reasons include access to additional resources including skilled workers, lower costs, economies of scale, favourable regulations and tax systems, direct access to new and growing market, and the ability to customize product to local tastes and styles. Also, the rise of regional trade alliances is another important reason explaining why organizations have increasingly internationalized (Bernardin, 2003).
This global expansion presents great challenges for human resource management. Many organizations headquartered in USA, Europe and Asia have expanded their global reach over the last few decades. In fact, chances are better than ever that one may work for a foreign corporation in his own community. Nokia, the cell phone giant from Finland, employed 70 percent of its work force outside Finland. Philips, the electronic multinational, employed 82 percent of the workforce outside its headquarters in the Netherlands. Nestlé, the Swiss food company had 98 percent of its workforce outside of Swisserland (Bernardin, 2003).
Even if you don’t ever work for a foreign investment or for a firm with significant direct investment, experts tell us that all organizations today are affected by the global economy. Even small business are using foreign-made materials or equipment. They are also, competing with foreign firms, and are selling their products and services in foreign markets. Consider the situation were Nigerian Independent Electoral Commission (INEC) had to import ballot materials from foreign countries thereby denying the local industries opportunity to make money and grow to international standard and also, create jobs within the economy.
Globalization was defined by Giddens (1990) as the ‘intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring miles away and vice versa’. This definition embodies some interrelated ideas, of “accelerating interdependence” (Ohmae, 1989), of “action at a distance” (Giddens, 1990) and of “time–space compression” (Harvey, 1989). ‘Accelerating interdependence’ is understood to be the growing intensity of international enmeshment among national economies and societies, such that developments in one country impacts directly on another country. ‘Time space compression’ refers to the manner in which globalization appears to shrink geographical distance and time. In a world of near instantaneous communication, distance and time no longer seem to be major constraints on patterns of human organization and interaction (Held et el, 1999). Globalization and information and communication technologies are leading to homogenization and convergence in organizations’ strategies, structures and processes and in consumer choice, along with a new global division of labour that widens the income gap between the ‘haves’ and ‘have nots’ both within and between societies.
Today’s world is organized by accelerating globalization, ‘which is strengthening the dominance of a world capitalist economic system, supplanting the primacy of the nation state with
transnational corporations and organizations, and eroding local cultures and traditions through a global culture (Kellner, 1989).
The emergent global economy and culture can be described as a ‘network society’ which is grounded in new communications and information technology (Castell, 1998). Some view globalization as the continuation of modernization and a force of progress, wealth, freedom, democracy and happiness. Others view it as another form of imposition. Its critiques view globalization as harmful and perceive it as a force that brings about increased domination and control by wealthier and overdeveloped nations over the poor and underdeveloped countries. They feel that it widens the gap between the ‘haves’ and ‘have nots’ (Castell, 1996).
From the social theory perspective, globalization involves the flows of commodities, capital, technology, ideas, forms of culture and people across national boundaries via a global networked society (Castells, 1998). The transmutations of technology and capital, work together to create a new globalized and interconnected world (Castell, 1998).
A technological revolution involving the creation of computerized network of communication, transportation and exchange is the presupposition of a globalized economy, along with the extension of a world capitalist market system that is absorbing evermore areas of the world and spheres of production, exchange and consumption. The technological revolution presupposes global computerized networks and the free movement of goods, information and people across national boundaries. Hence the internet and global computer networks make globalization possible, by producing a technological infrastructure for the global economy.
Globalization has an effect on employment patterns worldwide. It has contributed to a great deal of outsourcing which is one of the greatest organizational and industry structure shifts that
changes the way business operates (Drucker, 1998). Globalization is also seen as changing organizational structures where expenses can move up or down as the business climate dictates (Garr, 2001). For employees the trend toward outsourcing has been thought to result in a loss of fixed employment opportunities as a consequence of firms seeking to use cheap labour from countries like China, India, Mexico and Africa. The globalized economies have also had their effect on reward systems, migration, and on job security. It is against this background that I move on to state the problem.
1.2 Statement of the Problem
The world today is becoming more complex, dynamic and increasingly uncertain. Globalization, a process fostered and spurred by rapid change in the information and communication technology, is making the world economy more interdependent. It brings about the free flow of trade and investment among the nations. The process also results in higher efficiency increase in productivity, better products and lower prices. For the developing countries, the inflow of funds, new technology and management skills as well as smart partnership have catalyzed the rapid development of their economies. It is undisputable that Nigeria, as an open economy with a large domestic market has also benefited from the globalization process.
However, the Asian financial crisis that swept through East Asian countries in 1997 has demonstrated that the globalization process resembled a “double-edged sword”. Many East Asian countries, and other countries, have learnt a valuable lesson that the present form of globalization may not provide benefits to all developing countries as advocated by its proponents. The recent developments in the World Trade Organization (WTO) meeting where the non-trade issues such as labour standards and environment were proposed to be included in the new round of trade negotiations have wide ranging implications for developing countries in
managing their economies. Despite these disappointing experiences, Nigeria is still committed to globalization but would like the developing countries to have a say in the structure and process of globalization to ensure it is based on a win-win formula that benefits all.
As countries in the world decided to embrace market oriented development strategies and to open their doors to the world economy, the world has become one interdependent global market place. It is characterized by increasing worldwide competition and accelerating economic change with unpredictable outcomes. Under these circumstances, it is noted by Reich (1991) that competitiveness will be decided on a country’s or an enterprise’s capacity to add value to global economic products, services and processes; and a key contributor in this regard is the knowledge and skills of the workforce. The education and skills of the workforce has become the key competitive weapon for the 21st century. Drucker (1994) also stated that knowledge becomes the critical resource in wealth creation of society in this post-industrial era. The foundation of the post-industrial society is built on managing knowledge and continuous learning. The effectiveness and efficiency of the workforce in Nigerian organizations are important elements in this global competition.
To ensure that organizations retain its competitiveness in the new global economy, they have to initiated and implement various policy measures and projects aimed at promoting the use of knowledge and technology to spur further economic growth of their businesses. Both the private and public sector organizations are encouraged to be knowledge intensive and knowledge enabled to remain competitive and be relevant to surviving in the new era of economy. Human resource development has also been recognized as an important strategy to achieve the above mentioned vision and aspiration.
Given the importance of the human resource management role in steering and facilitating the continued development and management of the workforce and restructuring of organizations to unleash the full potential of the employees and to cope with the dynamic and unpredictable global information communication and domestic environment, the human resource management has to embark on policy measures and programmes pertaining to the development and management of human resources to enhance their competences to face global challenges. It is on that not that I state the objective of the study.
1.3 Objective of the Study
This study seeks to evaluate the effect of globalization and information communication technologies (ICTs) on Human Resource management practice in Nigerian organizations. The specific objectives include:
To ascertain both favourable and unfavourable effect of Globalization and Information Communication Technologies (ICTs) on Human Resource management practice in Nigerian organizations.
To evaluate the aspects of Globalization and ICTs that has direct impacts on Human
Resource management practice in Nigerian organizations.
To find out if there is a relationship between globalization and ICTs, and human resources management practice in Nigerian organizations.
To evaluate the ways Nigerian organizations stand to gain from Globalization and ICTs.
1.4 Research Questions
Based on the objectives, the following research questions were proposed to give direction and focus to this research work.
What are the favourable effects of Globalization and ICTs on Human Resource management practice in Nigerian organizations?
What are the unfavourable effects of Globalization and ICTs on Human Resource management practice in Nigerian organizations?
What aspects of Globalization and ICTs have direct impacts on Human Resource management practice in Nigerian organizations?
1.5 Research Hypotheses
The following Null Hypotheses were posed for the study and will be tested.
Ho1: 1. There is no favourable effect of Globalization and ICTs on Human Resource management practice in Nigerian organizations.
Ho2: 1. There is no unfavourable effects of Globalization and ICTs on Human Resource management practice in Nigerian organizations
Ho3: There is no aspects of Globalization and ICTs that has direct impacts on Human
Resource management practice in Nigerian organizations.
The following alternative hypotheses corresponding to the null hypotheses were also formulated for the study:
Ha1: There are some favourable effects of Globalization and ICTs on Human Resource management practice in Nigerian organizations.
Ha2: There are some unfavourable effects of Globalization and ICTs on Human Resource management practice in Nigerian organizations
Ha3: There are some aspects of Globalization and ICTs that have direct impact on Human
Resource management practice in Nigerian organizations.
1.6 Significance of the Study
It is expected that this study will contribute to existing literature in the area of the effect of globalization and ICTs on human resources management practice in Nigerian organizations. In the same vein, human resources managers and students will find this work interesting as it will give in-depth discussion on the effect of globalization and ICTs on human resources management practice in Nigerian organizations. The study will provide useful information on how changes in the economy and technology can influence human resources management practice. Also, managers will understand from this study the need to make adequate preparation or plan for technological changes and global innovations before they catch up with the organization and throw them out of business. Managers should see the need to conduct regular environmental scanning to discover the current technological and global trend in the business world with the view to formulating polices to keep abreast with such changes.
Organizations both profit and non-profit, will learn from this study as they will see how Globalization and ICTs affects Human Resources management practice in organizations. The effect of Globalization and ICTs on Human Resources management practice is devastating and it cost less to prepare for changes than to be swept out of business by technological and global innovations when not prepared. In that direction, the study will help stakeholders in every organization including the government, the labour union, investors as well as the general publics to understand how global changes affect business and human resources practice. It is expected that the study will serve as eye-opener to managers in matters of taking the issue of globalization and information communication technologies particularly, in the area human resource
management practice very seriously. This will enable them to adopt more desirable approaches in their management style and inter relationship with the environment.
1.7 Delimitations of the Study
This study is delimited to the effect of globalization and ICTs on human resource management practice in Nigerian organizations. Some selected Nigerian organizations that have embraced ICTs in their operations and multinational organizations operating within Enugu and its surroundings are to be studied. The study is also expected to unveil those areas of human resource management practice in Nigerian that requires improvement through the application of information and communication technologies. It is hoped that the report will be ready within
2011.
1.8 Limitations of the Study
Some obvious limitations the researcher encountered were that most of the respondents could not answer some of the questions due to lack of awareness of the subject matter of the study and how it applies to human resource management practice in Nigerian organizations. A some of the questionnaire was not returned and some were returned unanswered. As a result of these facts, the time spent for gathering materials was too long such that it caused unnecessary delay to the project work and the resultant huge cost associated with sourcing for data and materials was also enormous. Another major challenge was the absence of data, especially on the number of organizations operating in Enugu and the issue of irregular power supply which has become a recurrent phenomenon in Nigeria. This delayed the writing, typing and proofreading of the work.
1.9 Definition of Key Terms
Globalization: Globalisation refers to an increasing flow of goods and resources across national borders and the emergence of a complementary set of organisational structures to manage the expanding network of international economic activity and transactions. A global economy is one where firms and financial institutions operate transnationally, beyond the confines of national boundaries.
ICTs: Information and Communication Technologies (ICTs) consist of all technical means used to handle information and aid communication, including computer and network hardware as well as necessary software.
Human Resource management: Human Resource Management (HRM) is the function within an organization that focuses on recruitment of employees, management of employees, and providing direction for the people who work in the organization. Human Resource Management generally deals with issues relating to employees such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.
This material content is developed to serve as a GUIDE for students to conduct academic research
THE EFFECT OF GLOBALIZATION AND INFORMATION COMMUNICATION TECHNOLOGIES (ICTS) ON HUMAN RESOURCES MANAGEMENT PRACTICE IN NIGERIAN ORGANIZATIONS
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