Impact of Globalization on HRM: A Foxconn Case Study

This essay analyzes the impact of globalization on human resource management (HRM) practices, using Foxconn as a case study. It explores the challenges Foxconn faced, including labor issues and employee suicides, and examines the company's response through revised HRM strategies. The essay discusses the influence of globalization on HRM policies, including recruitment, training, employee welfare, and performance management. It highlights the importance of addressing employee grievances, promoting a positive work environment, and aligning HRM practices with sustainability goals. The essay concludes by emphasizing the significance of effective HRM in navigating the complexities of the international market and ensuring the long-term success of multinational corporations like Foxconn. The essay also references the challenges faced by managers in dealing with diverse functions, workforce diversity, and customer needs, and the need for a robust HR framework to maintain sustainability through HRM activities. The essay also provides a brief overview of the three dimensions of HRM and how Foxconn has adapted its strategies in response to the issues it has faced.

HUMAN RESOURCE
MANAGEMENT IN AN
INTERNATIONAL CONTEXT

Human resource management plays an important role in an organisation’s success. A
good team of experienced professionals cannot be constructed without the availability of good
and effective human resources (Armstrong and Taylor, 2014). It is necessary in multinational
companies to motivate, utilise and create good opportunities for the workforce for achieving their
objectives. Human resources are the precious assets of corporate structure. It is significant from
three dimensions that are organisational, social and professional.
QUESTION 1
Globalisation has a significant impact on human resource management’s policies and
practices (Storey, 2007). It is a combination of organisation's operations, processes and policies
in terms of different cultures, products, services and ideas. It also has impact on the way of
managing employees in an organisation. Human resource department must have knowledge of
recruitment and influence talents globally for the betterment of its organisation. Many factors are
available which affect human resource management in an organisation that are supply and
demand, expatriation, communication as well as training (Datta, Guthrie and Wright, 2005).
Example of it can be the impact of technology that requires variety of skills and competencies
from public officials.
Foxconn has many multinational clients in Asia, Europe and South America. The reason
of its popularity is the quality of products that it manufactures. It is the largest manufacturer of
electronic components (Dowling, Festing and Engle, 2008). IT companies prefer its products like
iPad, iPod, kindle, play station 3 and Xbox 360, because they are of perfect quality and more
reliable in use in routine office work. It also manufactures TVs for Sony, Sharp and Toshiba,
handsets for Nokia, Motorola and Huawei etc. The biggest client of Foxconn is Apple which
contributes about 40 percent in the company's revenue. Since, Foxconn has built strong bond
with its clients so number of its clients is increasing day by day. Its approach to deal with
customers is different from the rest of companies of the world who work in their space. While,
other companies make their products with keeping in mind customer preferences and desires,
Foxconn manufactures its products as per its own preferences to create a perfectly tight focused
product line that will emphasize quality in production as well as user experience. This company
is unusual in their long term and mid-range approach to product design. Many big organisations
have their 'Nike moment' at some stage, when they feel and realize the problems of keeping their
standards maintained, especially in an increasingly global environment (Bratton and Gold, 2012).
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Another reason of its being the biggest supplier is its problem facing attributes. When, its 18
employees committed suicide at plants in China, instead of avoiding the situation, it declared
more than doubled wages in 2010 for few workers in China and employed counsellors.
Human Resource management is that practice in an organization which emphasizes
mainly on conducting different employee welfare programs such as training, screening,
recruiting, appraising and rewarding. Main activities of an organisation does not change while
working in other countries, it remains the same as of their domestic country but the scale and
parameters might get change to the emergence of globalisation (Meredith Belbin, 2011).
Foxconn, is well known for making Apple products. It is in the way of adopting diversification
strategy due to increasing labour costs in China. Since, Workers suicide reports were received for
the year 2009 and 2010, all the employment policies and practices at Foxconn were scrutinized.
As per the Fair Labour Association report, it was noticed that overall labour standards were
violated by this company. FLA suggested some practices to overcome this failure like to
organise more democratic union elections and to remove management dominance from the
union, so that worker’s rights can be saved. Due to poor labour practices at Foxconn, Apple and
the similar companies are now suffering from pressure and that is another reason of human
resource management requirement in this company. For this purpose, Foxconn is planning to
open a chain of healthcare resorts for their employees in Asia and other countries. It has
introduced limited hours of working for employees and increased the wages as well as other
amenities to control those issues that are arisen in 2009 and 2010.
There are three dimensions of human resource management (Beardwell and Claydon,
2007). The first is utilization and distribution of human resources like work relations, training,
performance evaluation, employee recruitment and selection, pertinent planning as well. The
second dimension is different countries that deal with various functions and activities related to
human resource management. And, the last dimension is different types of working for any
international organisation.
QUESTION 2
Human Resource management is the part of organisation’s operations and activities. An
organisation cannot ignore the management of employees by redressing their grievances (Wall
and Wood, 2005). It directly affects the organisation from financial as well as reputation aspect.
As per the tragedy happened in Foxconn in 2009 and 2010, it badly damaged the reputation of
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company in the world market. However, this did not lead organization to get stopped the new
admissions of employees. After that, company was adopted many strategies and plans to recover
these heavy damages. Since, globalisation plays an important role in business and HRM.
Employee’s related issues are taking a huge shape as international market is expanding like
acquainting and coordinating with them with the availability of different backgrounds and
culture as well as making them confident about their identity and not being lost due to working
with the organisation and learning new business rules etc. (Guest, 2011). If, a company is having
proper human resource management system, then it can easily tackle with all these issues that are
mentioned above. Human resource management plays a vital role in this globalisation era. It is
helpful in determining the cultural aspect among the companies before finalizing any possible
arrangement. In fact, this globalisation process has helped Foxconn in improving its competence,
teamwork and new inventions.
In response to this tragedy, company first called and invited monks to exercise the evil
spirit for haunting the company. The company has adopted a HR recruitment strategy in such a
way that more employees started to search jobs in Foxconn. They appoint the right person for the
job profile that is suitable for them. The concern company treats its all employees with respect as
a family. They are now providing diverse trainings for the betterment and welfare of employees
as well as organisation. The HR department listens to the grievances of employees and applies
measures to resolve them. They teach by taking seminars on management between work and
personal life, so that these both cannot get conflicted.
In the given case study of the Taiwanese multinational electronics manufacturing
company, Foxconn, human resource management plays an important role to survive in different
markets of the world. Since, its business is spread all over the world like Asia, Europe and South
America and it captures around 40 percent of consumer electronic products in the world.
Employee management is not proper in this Taiwanese company, many employees committed
suicide that leads company to face a big downfall in its production as well as profits. After this
attempt of employees, Foxconn made a proper human resource management syatem and
provided compensation claims such as psychological assistance, no suicide contracts etc. to the
employees who died. Its vision is to make electronic products that can be usable and feasible for
all the humankind. Along with this, its vision is to adopt the way of selling traditional wasteful
gadgets outsourcing models by committing high moral benchmarks to achieve a win model for
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all shareholders, workers, group and administration. Foxconn works on the policy of “On time
delivery and zero inventory” that enhances the worth of its products. Even after adopting and
implementing the best strategies, the MNC's like Foxconn faces challenges in international
market like managers of the MNCs are having difficulty in dealing with heterogeneous functions,
managing workforce diversity and customer’s needs.
To remove these issues, Foxconn is required to develop a HR framework that are going to
help in maintaining sustainability through human resource management activities. It needs to
appoint an HR officer who will be allotted with the work of reviewing all the main functions of
human resources relating to the organisational culture, employee rights, recruitment, training and
employment, salary and compensation etc. The process should be made by involving the
alignment of HR structure with the sustainability (Ife and Tesoriero, 2006). While performing
the procedure, HR officer should apply the metric based tool that will be helpful in making
measurement of sustainability performance. Human resource department should be followed a
broad roadmap for the high business outcomes (Dreher, Gaston and Martens, 2008).
In conclusion, this essay reflects the impact of globalisation on human resource
management practices with regards to Foxconn group of companies. The essay explains about
the HR issues and problems that this company has suffered in the recent past and current HR
strategies that an organisation is adopting and following presently to survive in the market of
China. This essay concludes that Foxconn has introduced and well managed the strategies made
by HR officer related to training and development, recruitment, labour welfare, performance
management, working and living environment etc. All these factors have helped organisation in
surviving in long run market of not only China but also the other parts of the world like Asia,
Europe, South America etc. It helps other multinational companies in enhancing their product
quality. Further, above mentioned tragedy has forced management to take necessary steps in
making the life of its employees more secure as well as better.
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REFERENCES
Books & Journals
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Beardwell, J. and Claydon, T., 2007. Human resource management: a contemporary approach.
Pearson Education.
Bratton, J. and Gold, J., 2012. Human resource management: theory and practice. Palgrave
Macmillan.
Datta, D. K., Guthrie, J. P. and Wright, P. M., 2005. Human resource management and labor
productivity: does industry matter?. Academy of management Journal, 48(1). pp.135-145.
Dowling, P., Festing, M. and Engle, A.D., 2008. International human resource management:
Managing people in a multinational context. Cengage Learning.
Dreher, A., Gaston, N. and Martens, P., 2008. Measuring globalisation: Gauging its
consequences. Springer Science & Business Media.
Guest, D. E., 2011. Human resource management and performance: still searching for some
answers. Human Resource Management Journal. 21(1). pp.3-13.
Ife, J. W. and Tesoriero, F., 2006. Community development: Community-based alternatives in an
age of globalisation. Pearson Australia.
Meredith Belbin, R., 2011. Management teams: Why they succeed or fail. Human Resource
Management International Digest. 19(3).
Storey, J., 2007. Human resource management: A critical text. Cengage Learning EMEA.
Wall, T. D. and Wood, S. J., 2005. The romance of human resource management and business
performance, and the case for big science. Human relations. 58(4). pp.429-462.
Online
Riley, J., 2014. Strategy: Foxconn Pursues Diversification as it Attempts to Move up the
Value Chain. [Online]. Available through:
<http://www.tutor2u.net/business/blog/strategy-foxconn-diversification-moving-up-
value-chain.html>. [Accessed on 6th January 2016].
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